Tips for Improving Your Credit Score
Now may not be a great time to buy a house, but it IS a great time to get your credit “mortgage-ready.” Having a good credit score is essential when you are applying for a mortgage, and being pre-approved for a mortgage is essential when you are looking for a home – especially in a seller’s market like we have today.
Here are a few tips for getting your credit score “mortgage-ready”:
Fix or dispute any errors on your credit report.
Mistakes happen so contact the credit bureaus to dispute any errors you see and ask to have those errors removed.
Pay your bills on time.
Payment history makes up 35% of your credit score. One of the easiest ways to do that is to use autopay or Bill Pay.
Keep your Credit Utilization Ratio below 35%.
This ratio is measured by comparing your credit card balances to your overall credit card limit. An example is: You have two credit cards with a total credit limit of $5,000 and $1,000 of unpaid balances. Your credit utilization ratio would be 20%. That’s your debt owed ($1,000) divided by your total credit limit ($5,000).
Pay down debt.
Paying off debt can help improve your payment history AND your credit utilization ratio.
Keep old credit cards open.
Even if they have a $0 balance, keeping old credit cards open establishes a long credit history, which accounts for 15% of your credit score.
Only take out more credit if you really need it.
When you apply for credit, the creditor will run a “hard credit check” which can drop your credit score by 1 to 5 points.
If you like improving your credit score, we’re here to help! Give us a call at 1-877-769-4766 and a member representative will be happy to work with you to come up with an individualized plan to get your credit score shining!