Last month we talked about how a low credit score can affect your ability to qualify for a home loan and purchase your next home. Today we’re going to talk about how to improve your credit score with these 6 tips!
Stay on top of payments. While this seems obvious, it’s critical to raising your credit score. If you don’t pay on time, it can reflect poorly on any future lines of credit, including mortgage or home equity loans.- Erase any dings on your record. Dispute any entries that were a result of identity theft, and correct any errors in your credit history by going directly to the reporting institution.
- Pay off outstanding debt. Focus on making minimizing debt to raise your credit score. When you lower your total balance owed, you also lower the amount of interest you pay, and that will in turn, work toward improving your credit score. Stay on top of debt, and you’ll stay on top of your credit score.
- Charge less. If you’re charging less, you’ll have lower statement balances. Credit bureaus look at statement balances, instead of carrying a balance when they calculate your credit score.
- Don’t become a victim of identity theft. Make sure you carefully check your statements each month to look for errors, and alert your card issuer if you see any problems. Avoid sharing personal details, and use hard-to-guess passwords.
- Be patient. If you have big red flags in your credit history (filing for bankruptcy, for example), it will take some time for your score to bounce back. In most cases, it can take from 7 to 10 years to erase the negative effects on your credit score.
Have questions? Need a referral to an experienced mortgage lender? Your local Realtor® can answer questions and provide referrals. Good luck!