How To Improve Your Credit Score Before Buying a Home

If you think you’re ready to buy a home, it’s important to take a look at your finances and make sure they are in order. One aspect of doing this is making sure your credit score is high enough to qualify for a home loan. Perhaps you have a great score, or perhaps you need to improve credit score ratings in order to qualify. Either way, the following are some tips that will either boost or secure your score.

1. Know Your Score – You can’t really improve a credit score for mortgage lending if you don’t know where to start. Your report will show you what information was taken into consideration to come up with the score, as well as moves that were made to pull it down.
2. Dispute Errors – There are times that a report contains an error made on the part of the credit bureau. Not all ratings will be accurate, and it is up to you to know whether or not a particular dent in your history was a legitimate mark. Contact the credit bureau if you need to dispute an inaccuracy.
3. Reduce Debt – The more debt you have, the more chances you have that you won’t be able to make your payments on time, resulting in a negative mark on your rating. Whether on your own or with a financial advisor, come up with a plan to pay down your debt. Every payment you make and every debt you pay off will help that score to go up, even the smallest debts. Besides that, it will feel great.
4. Be on Time and Generous – When paying your bills, make sure they’re on time. Late payments never look good and never generate a positive result. If it’s in your budget, be generous in paying more than the minimum payment. This looks good on your report, and it helps you with reducing debt.
5. Be Honest – If you are truly having a hard time making a particular payment, contact that creditor and be honest about your situation. Credit counseling may be another option, but the important part is that you are honest about your finances so that you can get back up to speed more quickly.
6. Avoid Large Purchases – Before purchasing a home, you should avoid adding other large expenses to the table. Expensive electronics and new cars are often things that people go into debt over, but before a new home investment, they should be avoided. Banks don’t look fondly at multiple large purchases when they are considering loaning you money for a mortgage.

There are other things you can do as well, such as maintaining low balances and keeping your credit lines open, even if you don’t currently use them. Speaking to a loan officer or realtor at Levine Homes Real Estate will help you understand exactly how to improve credit so that you can get ready to purchase a new home.