While we may not notice the effects of our credit report on a daily basis, when we are ready to make a large purchase such as a house, a poor credit report may lower our chances of being approved for a loan. The reason for this is that a lender will likely refer to your credit report when deciding whether or not to give you loan. They will want to see what sort of debt you are in and if you have a history of paying bills on time etc. What should you do if you have a poor credit score?
Its never too late to work at improving it. You can start by obtaining a copy of your credit report which you are entitled to receive free of charge once a year. This way you will see it for yourself before a lender does. You can also pay your bills on time. If it is hard to remember to pay on or before the due date, why not set up an automatic payment plan to cover at least the minimum due? This way you will build up a good history of timely bill paying and avoid the hefty fees that accompany a late payment.
If you have collected a number of credit cards through the years it would be wise to get rid of those you no longer use. Make sure you call the company to cancel. Too many credit cards can give a lender the idea that you put yourself in economic difficulty by allowing yourself too much credit. It can work in your favor to maintain the longest held cards, though, as this will show a longer history of bill paying.
Remember, a good credit report may be more important than you realize when it comes to making a big investment such as a new home.