Responsible borrowing

You might think that it is impossible to maintain a perfect credit history, but you would be wrong. Still, credit histories are delicate things, meaning that they can be damaged pretty easily. Since your credit history has a direct bearing on your home mortgage rate, it is wise to learn how to keep your credit in good shape.

Some people have been raised with the view that credit is inherently bad. This is not in fact the case. Credit is only bad when you use it to finance purchases that you cannot really afford. Using credit wisely is a great way to establish the facts that you are financially responsible and that you honor your agreements. In fact, most lenders will be hesitant to grant you a favorable home mortgage rate unless you have had some form of credit in the past.

If you’ve been operating under the principle that credit is bad, you need to change your outlook immediately. Moreover, you’ll need to establish some kind of credit. Even if you have student loans, it is even better to open a credit card account.

Regardless of the accounts you choose to open, make sure that you are a responsible customer who pays bills on time. Late payments are the most common problem listed on credit reports, and will impede your ability to get a favorable home mortgage rate.

So if you’re new to credit, you have no excuse for bad credit. You simply need to manage your accounts responsibly. If, however, you’re an old hand with credit and you’ve mismanaged your accounts in the past, you might still have options, though your home mortgage rate will undoubtedly increase by at least a minimal amount.