By now most of us are aware of how important your credit score can be when it comes to purchasing the house you’ve always dreamed of. In fact even 2 points difference in your credit score can literally cost you thousands of dollars. With that being said there are some simple tips to follow to help improve your credit score, get a better interest rate, and assist you in finding a lender to help you buy your new home!
(An excellent credit score=720 and up…. A Good credit score= 680-719… An average credit score= 620-679… A poor credit score= 580-619… A bad credit score= 500-579… A miserable credit score= Less than 500)
* While this may seem obvious, one of the best things you can do is start paying down your credit card bills. When you have a lot of unpaid credit on your account it can make your score lower. By just working to pay down your outstanding debt over a two month period can greatly improve your score.
* The same thing can be true for paying your bills on time. Even if there is a “grace period” offered it is better to pay before the actual due date. Doing this without fail for a few months can improve your score.
* Don’t close out/cancel credit cards if you are trying to improve your score. While it may be tempting to do so it can actually decrease your score because then you would be using a higher percentage of your credit available. If you feel that it is necessary for you to cancel some then be sure to keep your oldest card open regardless of the interest rate. Banks will also look at length of your credit history and if all of your credit cards are newer ones than it appears you are a new borrower.
* Don’t open a lot of new cards to increase the amount of credit available. Doing so looks suspicious to lenders.
* While it is highly suggested you work on paying down the balances you can also improve your score immediately by evening out your usage. What I mean by this is by taking a card that is almost maxed out and putting some of the balance on another card. Try to get the usage to about 20-30% of your allotted credit limit on each card as opposed to zero balance on a few and 90% on one.
* Another thing that you can do immediately is to go over your credit report with a fine tooth comb. You would be amazed at how often there are mistakes on credit reports. Ensure that the lenders have reported your credit limits accurately as well because that can greatly affect your credit ratio.
If you have any questions or want more suggestions on improving your credit score or which lenders will work with you feel free to contact us. We look forward to hearing from you!