Any long-term installment loan in good standing is a major positive to have on your credit report. Mortgages and auto loans can be two of the best things to own since they can affect your credit rating so much. Both of these types of loans are weighted heavily and act as anchors for your credit rating. Conversely, a foreclosure on a mortgage or a default on an auto loan can wreak havoc on your credit report.

What can you do to preserve your good credit? The following are tips regarding auto loans and mortgages in relation to building good credit:

• Always make your auto loan and mortgage payments on time and in full. Thirty five percent of your credit rating is directly related to if you make payments on time, and mortgage companies and lenders of auto loans alike are very unforgiving in regards to late or partial payments. Prioritize your mortgage and auto loan payments, realizing they affect your long-term credit capacity more than any other debts you may have.

• Consider refinancing if you are unable to make the payments. It’s better to take on a little more debt in the long run (through the added interest you’ll pay) than to miss payments. Both mortgages and auto loans are so valuable that you won’t want to make a single misstep with either one. The consequences on your credit history are too important to sacrifice either of these.

• If you are having trouble making payments, contact the lender immediately and ask for a hardship deferment or forbearance. Make sure they understand you will not default on the loan and take your credit record seriously.

• Don’t allow too much debt to accrue on your home equity line of credit. If you must put debt somewhere, make sure to preserve your home. While it’s great to take advantage of the tax benefits provided by your home equity line of credit (since payments towards interest are tax deductible, lowering your taxable income), you don’t want to max out your home equity line of credit and then encounter an emergency – like unemployment or an injury – and then risk not being able to make the mortgage payments.

• Beware of adjustable rate mortgages and auto loans. If you can, commit to a fixed rate mortgage or auto loan so you won’t get surprised with a sudden increase in interest rates. If you do accept an adjustable rate mortgage or auto loan, make sure you ask the right questions so you know what the rate caps are to the loan.

• If you can pay down extra on your mortgage or auto loan, consider if you might want to put that money towards other debt. A mortgage or auto loan is a great asset to your credit portfolio. Consider whether you might benefit more from paying off credit card debt instead.

Hopefully these tips will help you use your mortgage and auto loans to bolster your credit rating!