How To Boost Your Credit Score

Before even starting your search for Grand Forks homes, it’s important to make sure you understand your financial situation and make sure your credit score is solid. You can get your credit score and report through the three biggest U.S. credit bureaus: Experian, Equifax, and TransUnion. Each releases its own credit scores and reports, but they should all be roughly the same. If there are errors, be sure to fix them, but if your credit score needs a boost, here are some tips to help you be better positioned to buy your new home.

Reduce Debt

One of the most effective ways to boost your credit score is to reduce your debt. Focus on paying down credit card balances, especially those with high interest rates. Aim to keep your credit utilization ratio—the amount of credit you’re using compared to your credit limit—below 30%. This shows lenders that you manage your credit responsibly. If you can’t reduce the debt significantly, try asking your credit card companies to increase your limit. This will help your debt-to-credit ratio.

On-Time Payments
Consistently late payments will severely damage your credit. Consistently paying your bills on time is essential for a good credit score. To avoid these dangerous delays, set up automatic payments or reminders to ensure you never miss a due date.

Erase Mistakes
Sometimes it’s possible to contact a company you have credit with and ask them to remove late payment from their records. However, this only works if you have one or two late payments, but it can provide a small boost to your score.

Don’t Open New Credit
Each time you apply for credit, it triggers an inquiry on your credit report, which can temporarily lower your score. This is why it’s never a good idea to open new credit cards or apply for new loans separate from the new home you’re trying to purchase. Multiple inquiries in a short period can be viewed as red flags to many lenders.

Improving your credit score takes time, which is why you should check your credit long before starting your home search. However, the sooner you start paying down debt and/or maintain on-time payments, the better it will be for your score and your likelihood of getting a home loan.  A higher score can help you secure better mortgage terms, making your dream of homeownership more affordable. If you’re ready to purchase one of the Grand Forks homes on the market, contact us today to help you find the home that fits your needs and budget.

Categorised in: Finance Tips, Finding the Mortgage That Suits You Best, How To Boost Your Credit Score, Things to Consider When Buying A Home, Things To Do

This post was written by Crary Real Estate