03 Oct 2017

5 Ways To Get Your Credit Score Ready For Homeownership

When a new buyer enters the real estate market, there are several things that are assessed in order to determine whether or not they can afford their purchase. The most important of these are income, down payment and credit score.

Credit scores affect whether a buyer will qualify for a loan, the value of that loan and the interest rate they’ll be charged. A credit score of 650 is ideal but, of course, the higher, the better. 

If you’re considering buying a home but need to get your credit up, here are 5 ways to improve your score.

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1. Dispute Errors

Sometimes, even the credit companies or collection companies make mistakes.  At times, accounts that have been paid can still be impacting your score or accounts that aren’t yours at all can make their way onto your credit report.  If you see something that doesn’t look right, question it. If a legitimate error is found, dispute it and ask to have it removed.  

2. Negotiate

If you do have a credit issue that you know you are responsible for. you can call the creditors and offer payment--even a partial one--in order to have your debt erased from your credit report.  To do this you can write them a letter or speak to them directly.

3. Increase your credit limit regularly

If your credit limit is $1000 ask for $2000.  Your credit score increases when the bank and institutions see that others trust you to give you more money and see that you are paying them back.  *SIDENOTE:  Just because you get more money doesn’t mean you should to be spending more money.  The objective is to stay under 60% of your credit limit while making full payments regularly and on time.

4. Use multiple forms of credit

Whether it is a credit card, a cell phone bill, or a line of credit, the more “types” of credit you can accumulate, the better. Different types of credit affect your score in different ways so it is never a bad idea to cover as many areas as you can to grow your credit score.

5. Pay your bills on time

No matter how many of the above tips you follow, not paying your bill will always keep your credit score low.  Try to pay your bills in full. If you can’t pay in full, at least pay on time and as much as you’re able to.  Minimum payments are made to keep you in debt, so pay as much as you can, when you can, and always on time.

Read 1686 times Last modified on Saturday, 29 September 2018 17:31
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