For people looking for the best mortgage rate possible on a big home loan, there are few factors more important than credit score. This basic measure goes a long way to determining everything from your rate to which kinds of loans you qualify for, and at Altius Mortgage, we’re here to help you keep it as high as possible.

What is a credit score, and what are some simple ways to keep it high before a mortgage search begins? Let’s take a look.

What is Credit Score?

Your credit score is a numerical representation of your creditworthiness. It’s based primarily on a credit report, which is sourced from various banks or credit sources. In the United States, credit score is generally from one of three main bureaus: Experian, TransUnion and Equifax. There are also a few different formats for calculating your score, which will vary from bureau to bureau. With a FICO score, the most popular form of calculation in the US, your score will range from 300 to 850.

Staying Organized

One of the biggest factors in keeping credit score up? Stay organized. Late bill payments or missed payments are one of the easiest ways to lower your score, and online banking makes scheduling payments easier than ever. Don’t miss out on a great mortgage rate just because you forgot a few payments.

20-10 Rule

Credit score can be ruined by basic mistakes in daily finances, but the 20-10 rule will help keep you organized. It states that you should never let credit card debt reach higher than 20 percent of your yearly post-tax income, and you should never use over 10 percent of your monthly income to pay down credit card debts. If you can go even tighter than this, even better.

Simple Debt

Credit can’t be raised unless you’re actively paying some debt, but there are low-risk ways to boost it here. If you’re capable financially, take on a few new debts which you know you can repay easily, and well before the due date – this could be something as simple as groceries or a small purchase. As long as you make payments on time, this can slowly help raise your credit back to where it needs to be.

Emergency Funds

Never be caught without funds for an emergency – try to always keep at least 15 percent of your credit open, or even more if you have a low open credit threshold. Being forced to max a card for an emergency can drop the bottom out of your credit score.

Want to learn more about credit score, or any other mortgage solutions? The mortgage brokers at Altius Mortgage are standing by to assist you.