If you're considering buying a house or taking out a loan
next year, you'll want to get your credit rating in the best possible shape.
But what's the best way to approach it?
In a Reddit "Ask Me Anything" thread posted
earlier this year, an advisor from a major credit card company took dozens of
burning personal finance questions from the public, and quite a few concerned
how to improve your credit.
The advisor asked to remain anonymous, but Reddit vets all
experts before they host an AMA thread. We've also reviewed the responses and
found them to be accurate. Here's how the advisor suggests you tackle your
credit rating:
Q: What's the best way to increase my credit rating so banks
are knocking at my door with awesome offers?
A: Unfortunately, the best answer for this one is always
going to be TIME. But there are a lot of factors that you can do that will
speed up some of the process. Do not do any balance transfers between your
credit cards and stay away from cash advances. Mortgages will always make sure
your "debt-to-income" ratio is low. This means that if the amount of
debt you have is close to what your annual income is, they will likely reject you.
Q: Does how much credit you have matter as much to potential
credit lenders as how well you make payments?
A: Having a card or two with a higher limit is good. But you
don't want too much unused credit either. The biggest thing you'll find with
loans is that they are looking for HOW MUCH history you have with your current
creditors. The longer the better.
