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Has your credit score gotten out of control? Are you in the market to buy a home but your credit score is too low? The truth is that many Americans find their credit to be inadequate once they end up in a meeting with a loan officer to discuss buying a home. Whether first-time buyers or long-time veterans of the home buying process, your credit score must meet some minimum guidelines in order to qualify for a mortgage.
It
does take some time, but with some effort, diligence and
responsibility – you can get your credit back on track and be well
on your way to owning a home. Here are five easy-to-follow tips that
can boost your credit score fairly quickly.
Pay
Your Bills On Time
This
one may seem obvious but many borrowers have no idea just how much
paying on time positively impacts a credit score. Likewise, the
damage done when you don’t pay bills on time is hard to repair. The
best way to ensure things get paid on time is to set up automatic
payments or utilize the myriad apps out there designed to make you
remember. Use your Google calendar, sync it with your smartphone,
print out a bills chart – whatever it takes, don’t forget to pay
your bills on time!
Keep
Balances Low
A
common misconception about credit health is that there are no
penalties if a borrower charges credit cards close to the maximum
credit limit. On the contrary, lenders and credit experts suggest
keeping your balances as low as possible. This demonstrates your use
of the card responsibly. Remember, unless you have the funds to pay
those balances back it’s best not to charge large balances in the
first place. Work toward paying off balances in the order from
highest to lowest balances for the maximum benefit to your credit
score.
Be
Careful When Opening New Accounts
Opening
and closing accounts creates a negative impression to the credit
powers that be. The red flags caused on your credit profile can harm
your ability to borrow now or in the future. It is much better to
obtain and keep just a couple revolving credit accounts open and then
use them to the maximum efficiency. If you’re concerned that there
are inaccuracies on your account, check with all three
credit-reporting agencies (Equifax, Transunion and Experian) to
request a free copy of your report so you can clarify any errors.
Limit
New Credit Inquiries to a Small Window of Time
A
number of inquiries within a small window of time are treated as a
single inquiry. When shopping for a mortgage or even an auto loan, a
good practice is to entertain as many quotes as you like within a
short window of time. Credit agencies know and recognize that
consumers need to shop around for the best rates but when you have
inquiries that are all over the map and spanning months, not weeks,
it can hurt your credit score with each inquiry.
Always
Handle Your Credit Responsibly
It
goes without saying that your credit outlook is probably the most
important thing for your financial health and well being. It is
critical to handle all financial transactions responsibly so that
when you are ready to buy a home or a car or anything else that
requires a strong credit outlook, you are armed with a great record!
The old adage “one step up, two steps backward” holds true when
it comes to making a mistake on your credit report and trying to get
it repaired.
~
Establishing
a good credit history is a good habit if you want to get a great rate
on a mortgage or other loans. If your credit is a concern, we can
connect you with one of several lender partners we work closely with.
And they will gladly work with you to rectify specific concerns.
Regardless of where you are in the process, we welcome your calls and
visits if you are interested in buying or selling a home.
