What Bills Help Build Credit?
Individuals researching the various elements of the home loan application and approval processes may want to learn more about what bills help build credit. Various types of bills can help a potential borrower build their credit score, including the following examples:
- Credit card bills
- Auto loan bills
- Personal loan bills
- Mortgage bills
- Medical bills
- Student loans
- Monthly utilities
Are There Other Ways to Build Credit?
Yes, there are multiple methods that potential borrowers can use to begin building their credit scores, including the following examples:
- Paying all bills on time and in full every month
- Decreasing or eliminating personal debt, including credit card balances
- Maintaining low balances on all existing credit cards
- Limit credit and loan applications
- Ensuring there is no unfair, contestable, or disputable credit history information
- Decreasing high credit card limits
Are Credit Scores Important?
Yes, credit scores are extremely important! Mortgage providers largely rely on an individual’s credit score and history to determine their eligibility for a home loan as well as their overall risk factor and borrowing power.
Applicants with low credit scores and poor financial histories will generally be classified as high-risk borrowers and be required to pay high-interest rates, Lenders Mortgage Insurance (LMI), or, not obtain approval for a home loan.
Applicants with high credit scores and good financial histories will generally be classified as low-risk borrowers. Low-risk borrowers are typically not required to pay for LMI, have access to lower interest rates, and receive increased borrowing power.