18 May I want to buy a home. How can I raise my credit score?

Q. I want to buy a home. How can I raise my credit score?

— Trying

A. Your credit score is a huge component of what kind of mortgage you can get.

The lower your score, the higher the interest rate will be.

And in this climate, you want to do everything you can to have the best possible credit score.

First, make sure you pay all of your bills on time, even if you can’t pay the full amount. Your payment history makes up a large part of your score.

Next, look at how high your outstanding balances are compared to the overall amount of credit that’s available to you. This is known as your credit utilization ratio.

The higher it is — meaning the more of your credit that you actually use — the worse it is for you.

That’s why paying down your balances is important.

Don’t cancel any cards right now, even if you don’t use them. That can mess with your credit utilization ratio because it will lower your overall available credit.

Keep paying on time, and pay it down.

Good luck.

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This story was originally published on May 18, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.