Summer is in full swing and with the warmer temperatures we have many home buyers outside of Western New York looking to buy a home.
Inflation has caused many things to rise sharply throughout New York State. From gasoline and fuel to chicken wings, the cost of goods and services has increased exponentially. These increases also include housing.
According to a report by the Buffalo Niagara Association of Realtors, the median selling price of homes in the Buffalo area has increased more than 65% since March 2020. Prior to the COVID-19 pandemic, the average home in the west from New York was selling for $171,140. , in May 2022, that average selling price jumped to $275,217.
These steep price increases have made it especially difficult for people to buy a home, especially first-time home buyers who may not have as much cash available to spend more than their budget.
This is why it is very important to make sure your credit is as good as possible. Here are some tips to make sure your credit is in top shape:
Try to keep your credit utilization at 30% or less
Your use of credit, or the amount of credit you’ve used compared to the amount of credit you have, is a key indicator for lenders about the health of your finances. Try to keep this amount below 30%, i.e. if you have $10,000 of available credit, spend no more than $3,000.
Pay your bills on time, every time
According to FICO, your payment history represents the largest percentage of your credit score. Just paying your bills on time will go a long way in helping you get great credit.
Closing accounts can lower your score
If you have an unused account, it may make more sense to keep the account open. Closing old accounts may result in less available credit, which may increase your usage, and higher usage may equate to a lower score.
Not using credit is not necessarily a good thing
Not using a lot of credit or having a thin filemeans that credit agencies don’t have a lot of history to judge your creditworthiness, which can also mean a lower credit score.
Try to pay off your revolving debt before the installment debt
Your revolving debt like credit cards and lines of credit usually has a higher interest rate than installment debt like car loans, so when reviewing your credit plan, start by paying off debt at higher interest.
Check your credit report often
According to the Consumer Finance Protection Bureau, it is estimated that more than 30% of people have errors in their credit report. Checking your credit report often can ensure that your report is accurate and will help with your credit score.
Thanks to changes made by the Federal Trade Commission, every American can check their credit report for free every week until the end of 2022. Don’t be caught off guard, because knowing is half the battle.
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