4 Things Future Homebuyers Need to Know About Raising Their Credit
Are you considering purchasing a home in the near future? Then now is the time to beef up that credit score! Your credit score plays a crucial role in getting a home loan. All lenders have specific rules governing who gets a loan and what their interest rates will be – and they all place a strong emphasis on your credit score. Here are some tips to make improvements:
1. Pay all your bills on time, every time. Delinquent payments can have a negative impact on your scores even if they’re only a few days late. You can pay off the collection fees but they will remain on your financial record for seven years!
2. Keep your credit card balances low. High outstanding debt hurts your credit score. You should use no more than 30% of your credit limit on each card at any given time, but for best results try to aim even lower.
3. Don’t open new accounts unless absolutely necessary. If a higher credit score is what you seek it is far more effective to pay off your debts than to open a new account and transfer the debt. Don’t let the promise of a new card with no transfer fees fool you! Opening a new account will negatively impact your credit score in the short term.
4. Make a payment plan to stay on schedule for regular payments. Ultimately, you want to cut down costs. Repairing your credit in the long term requires learning how to manage credit responsibly over time.
Improving your credit score is more about repairing past mistakes and learning how to maintain good, consistent credit. Follow these tips with patience and discipline and you WILL see an improvement.
For any questions on your credit score, applying for a loan, or the finer points of the mortgage process, please reach out to our talented Loan Officers at (480) 314-1414.