As I’m sure you are aware, your credit score is one of the main determining factors when it comes to what mortgage options are available to you and how likely you are to get approved for the loan you want. In other words, usually the better your credit score, the better the rate and terms you will qualify and be approved for.
Because your credit score is such an important aspect of the mortgage process, I wanted to share some tips with you about how to raise your credit score. Being proactive about your credit and following through with these tips can help dramatically improve your mortgage options.
The first thing you will need to do is check your credit. You will need to find out what you are working with and compare that to where you want to be. While it is important to have a decent credit score, you don’t need to be striving for perfection. Find out where you stand and set a realistic goal of improving to a certain point that meets the qualifications for the mortgage loan you want to get approved for.
Once you are familiar with your credit score, it is time to get to work!
One of the fastest ways to improve your credit score is to reduce the amount of debt you currently owe. If you are not already paying off your debts, start now. Use the information pulled with your credit report to start tracking the debts you owe and begin making payments as soon as you can. If you can afford to make more than one payment a month, do it. The more debt you can pay off, the faster you will start to see the positive results.
It is also important to remember that once you begin this process, you should try not to add any additional debt. If you have to use your credit card, keep the balance as low as you possibly can and set reminders to pay your bills on time, so you can avoid paying interest or late fees.
Another great way to improve your credit is to open a new account. Remember that your goal is to have as little debt as possible, so if you do decide to open an additional credit card, follow the tips above to stay on top of your monthly payments and keep your balance low. Don’t make the mistake of opening too many accounts at once, though, which can have the opposite effect on your credit.
If you are unsure about how to view your credit report, or still don’t feel that you will be able to raise your credit score in time, give me a call today! I will review your finances with you to help you find the best options and create a plan to get you moving towards your goal of homeownership!