Good credit is important if you’re planning on buying your first home. This is because your credit rating impacts your ability to get a mortgage as well as the mortgage rate you receive.
Considering that a lower mortgage rate can save you thousands of dollars over the life of your loan, building and improving your credit rating (even if you’re satisfied with your current rating) provides powerful long-term benefits.
There are a range of ways to build and improve your credit
When it comes having good credit, the single most important thing is always paying your bills on time. A simple way to do this is setting up automatic online payments so you won’t forget to pay your bills.
Another important part of good credit is having a history of consistent on-time payments of loans and credit cards.

If you don’t have loans or car payments, credit card payments are another good way to start building credit. For a low-risk and high-reward way to build credit using a credit card, consider getting a secured credit card.
Secured credit cards have credit limits based on your deposit amount
In contrast to traditional credit cards, which often have credit limits worth thousands of dollars, secured credit cards require you to make a security deposit with the financial institution issuing your card. Your credit card’s limit will be based on this deposit (e.g., $200, or whatever amount you choose).
Secured credit cards protect lenders working with consumers without established history of managing credit, and minimize risk of you creating high credit card debt that you can’t easily pay back.  Should you be late on your secured credit card payments, lenders can take money from your security deposit to collect the dollars you owe.

Make some purchases each month using your secured credit card and pay them off
Once you have a secured credit card, you can make some reasonable purchases each month using the card, and pay the the balance off on time. Or you can pay the balance down to a small amount, such as $10. By doing this, you’ll steadily build up credit history while increasing your credit score.

When combined with paying your bills on time and having steady employment, effectively managing a secured credit card is a good strategy for beginning your journey toward homeownership.

To buy your first home, good credit is essential
There are many parts to buying your first home, but good credit is one of the most important requirements. A simple plan for building good credit without much risk is using a secured credit card.

If you’re ready to begin your journey toward buying your first home, or have questions about building good credit, contact one of the friendly loan originators at Open Mortgage.