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Maximizing Your Credit Score

Planning ahead can help you avoid a last-minute hurdle that may affect your eligibility for the mortgage of your choice.

You can take steps to improve your credit score:

1. Pay all bills on time

Failing to make your payments on time or missing them entirely can have a major impact on your ability to obtain credit. Setting up pre-authorized payments is a great way to ensure payments are made on a regular basis.

2. Pay minimum balances when you can't pay the entire amount

Making minimum payments, when the option is available, will help to maintain a strong credit score.

3. Establish a credit history

Responsible use of credit cards, lines of credit and loans will produce a better credit rating than no history at all. If you are just starting to establish your credit history, ensure all credit accounts you have opened can be managed appropriately.

4. Keep your total debt load in check

Several small balances can quickly add up to an unmanageable situation. For example, avoid revolving debt on several credit cards at once.

5. Consolidate your debt

Consolidating balances from several credit cards into a lower-rate loan may be a smart move to reduce your interest charges and lower your payments so that you can keep them current, as long as you don't continue to increase your debt load. But simply making payments on one credit card with funds drawn, for example, from another credit card does not necessarily improve your overall credit score. It's much better to focus on paying off the credit you have.