Homeownership Guidance, Advice and Blogs

As the Director of Affiliate Relations at HomeFree-USA, I’ve always been fascinated with how people handle their money. Like everyone else, I’ve had my financial ups and downs. In fact, it took me 32 months to pay off $32,000 in credit card bills and build up a six-month emergency fund. While that was a very difficult period, I am grateful – and wiser -- for the experience.

Through my personal experiences and working at HomeFree-USA, I’ve gained a ton of insight that I feel compelled to share. You’ll find those lessons here. Feel free to take the thoughts and ideas that resonate with you most and put aside the rest for later. I look forward to sharing my journey.

Do This to Improve Your Credit Score

In some cases, credit card debt is more harmful than in others. Here’s how to make sure your balances aren’t weighing your credit score down more than they have to.

Just because you have access to credit doesn’t mean you should use all of it. In fact, using all of the credit you have available can actually hurt your credit score.

You probably know that it’s not a good idea to max out your credit cards. But did you know that it’s also not a good idea to have credit card balances anywhere near your credit limits?

Credit utilization is the amount of credit you use compared to the amount of credit you have available. Say you have a credit card with a $1,000 limit. If you’ve charged $800 on that credit card, your credit utilization ratio would be 80 percent. However, if you’ve only charged $100 on that credit card, your credit utilization ratio would be 10 percent. When it comes to your credit score, the lower your credit utilization ratio the better.

Understanding how credit utilization works can help you stay on top of your credit and improve your score. Try these strategies to keep your credit utilization ratio in check and possibly give your score a boost:

Keep your balances low. If you can’t pay your entire balance,  try to keep it below 30 percent of your credit limit. That means on that $1,000 credit card, keep the balance lower than $300.

Pay off debt on cards with a high utilization ratio. Prioritize paying off credit cards with a high credit utilization ratio.  You may see your credit score improve.

Move debt around. If you have multiple credit cards and one has a high credit utilization ratio, you may benefit from transferring some of the debt to another card that has a higher credit limit – as long we you don’t max out the second card in the process. 

For personalized help with managing your credit and increasing your score so you become mortgage ready, contact HomeFree-USA.