Raise Your Credit Score for Smarter eMortgage Savings
If you're planning to apply for an eMortgage, one of the most important factors that determines your interest rate is your credit score. A higher credit score can unlock lower rates, saving you thousands of dollars over the life of your loan. Let’s dive into actionable strategies to improve your credit score and secure the best possible eMortgage rates.
1. Check Your Credit Report for Errors
Mistakes on your credit report, like incorrect account details or fraudulent activity, can drag down your score. Request free copies of your credit report from the three major credit bureaus — Experian, Equifax, and TransUnion — through AnnualCreditReport.com. Review the reports carefully and dispute any errors.
2. Pay Bills on Time
Payment history is the most significant factor in your credit score, making up about 35% of the calculation. Set reminders or automate payments for credit cards, loans, and other bills to ensure you never miss a due date.
3. Reduce Credit Card Balances
Your credit utilization ratio — how much credit you’re using compared to your total credit limit — plays a key role in your score. Aim to keep this ratio below 30%, and ideally closer to 10%. Paying down high balances can quickly boost your score.
4. Avoid Opening Too Many New Accounts
While it may be tempting to open new credit cards to increase your available credit, doing so can temporarily lower your score due to hard inquiries and reduced average account age. Only apply for new credit when necessary.
5. Keep Old Accounts Open
The length of your credit history impacts your score, so keeping older accounts open (even if you no longer use them) can be beneficial. Closing accounts can shorten your credit history and increase your utilization ratio.
6. Diversify Your Credit Mix
Lenders like to see a healthy mix of credit types — such as credit cards, auto loans, and mortgages — which can show you’re able to handle different forms of credit responsibly. While you shouldn’t take on debt you don’t need, diversifying your credit over time can help improve your score.
7. Become an Authorized User
If you have a family member or close friend with a strong credit history, ask if they’ll add you as an authorized user on their credit card. This can extend your credit history and improve your score — just be sure they manage their account responsibly.
8. Consider a Credit Builder Loan
If you’re new to credit or rebuilding your score, a credit builder loan can help. These loans hold the borrowed amount in a savings account while you make monthly payments, and the lender reports your positive payment history to the credit bureaus.
Final Thoughts
Improving your credit score takes time and consistent effort, but the rewards are worth it. A better score can lead to lower eMortgage rates, smaller monthly payments, and significant long-term savings. Start working on your credit today to put yourself in the best financial position when you’re ready to secure your eMortgage.
Need more personalized advice? Contact an eMortgage professional to explore your options and see how your credit score can shape your loan offers.
