Your credit score is inevitably one of the first things that a lender will look at when deciding whether to approve your pre-approval or loan. Maybe you have had some issues in the past and don’t have as high of a credit score as you would like. By improving your credit score the lenders will more than likely give you a lower interest rate and you will not be responsible for as big of a down payment as those with poor credit scores. Here are a few simple tips to help improve your score over the next few months.
* First things first: Request a copy of your credit score and make sure that the information is correct. You would be amazed at the amount of mistakes, falsely reported late payments and debts that can occur on a credit report.
* Next step to take is ensure that all bills from here on out are paid on time. I have found that setting up your bills online for automatic bill pay is a convenient and fool proof way to avoid those late charges and improve your credit.
* While tempting, beware of those credit repair claims that many companies make. Most of these are scams. The only real way to repair your credit is to adhere to these tips or follow the advice of a certified lending officer.
* This may seem obvious and you may say “well if I had the money I wouldn’t be in this situation” but paying down existing debt is a surefire way to improve your overall credit. The goal is to keep your revolving credit percentage low, ideally around 10%. For example if you have $10,000 available in credit the best way to increase your credit score is to keep it around $1,000 or lower.
* Another way to improve your overall credit is to pay off your smaller balances. If you have $30 on one credit card, $50 on another, and $300 on yet another you should pay off the smaller ones and only use 1 or 2 credit cards to carry a balance.
* Try to lessen the amount of times you apply for credit or do so all around the same time. The reason for this is that everytime you apply for credit such as a student loans, car loans, etc your credit score and dip a bit for a year.
Overall the best way to improve your credit is to follow these simple tips and be mindful of all of your money going out. If you can maintain a good credit score you will be much more successful in obtaining that home loan to get the house you’ve always dreamed of. If you have any more questions regarding your credit score or what you can do to help improve it feel free to contact me! I look forward to hearing from you!