So, you’ve built up your credit. Now what? How can you maintain it, and what can it do for you?
We asked Fannie Mae to help explain how you can manage your credit and use it to go after big goals and big dreams — like homeownership. Check out these tips to help you create a plan and maintain your credit now.
Build a budget
When you want to maintain good credit, a budget is key. Determine how much you make and how much you currently spend. Track spending using a budget tracker so you can see where you may be able to cut back. If you’re focused on paying off debts, try to avoid unnecessary spending and consider setting up automatic payments — this can prevent you from missing a payment, which could trigger late fees and even damage that credit score you’ve worked so hard to build up! Set small goals for yourself and take it one step at a time — but remember to celebrate the wins along the way to help you stay motivated!
Level up your score
When you have a strong credit history, you may unlock more borrowing options at lower interest rates. Plus, potential employers, landlords, and insurance companies often reference your credit report when determining your candidacy for jobs, rental agreements, and insurance premiums. A high credit score and great track record of on-time payments will position you for better opportunities, especially when it comes to getting a mortgage.
To boost your credit score, limit the number of credit cards you have and maintain a low balance — keep that credit utilization ratio at less than 30%. Your score builds over time, so just by paying your bills on time and only using your credit cards in moderation, you’ll be improving your credit history. If you’re looking for a guide to help you navigate your financial journey, get some expert advice by working with a financial pro.
Put your credit to work
Credit can be your friend, especially when you’re applying for a mortgage. Let’s break it down: According to the 2021 American Community Survey*, the Black homeownership rate is 44%, 29 points lower than the 73% white homeownership rate. And that’s not much different than it was 50 years ago. It’s time to make a change — and that starts with all the amazing work you’ve done to build and maintain your credit.
If homeownership is one of your goals, Fannie Mae can help you get ready for the homebuying process. They created a free, first-time homebuyer course called HomeView™ — available in English and Spanish. HomeView can help you learn how to save and prepare for your home purchase, work with lenders and real estate professionals, understand the mortgage process, and so much more.
Learn more about how you can manage your credit and make it work just as hard as you do!
*Source: 2021 American Community Survey and the 2019 Current Population Survey/Housing Vacancies and Homeownership Survey.