It is pretty much common knowledge that when applying for a mortgage one’s credit score is pretty relevant to the whole process. Not only is it “pretty relevant,” but someone’s credit score can drastically affect everything regarding a mortgage, from being accepted in the first place to the interest rate they have to pay on their loan. With that in mind here is our quick 6 steps to improving your credit score.
The Easy Stuff
Step one when you are thinking of applying for a mortgage and you want to improve your credit is probably the most simple. Do nothing to further harm your credit. Pay bills on time, don’t take on more debt, don’t quit or change jobs.
Next, when you have your credit report pulled, look it over and correct any errors that are reported. Work with the companies that have reported these errors. It may also prove useful to work with one’s loan officer when deciding which errors to tackle first.
Another way to make one’s credit utilization appear healthier is to ask for a higher limit on credit cards. By doing this you may decrease proportionally the amount of available credit you are using. Make sure to find out first if this will result in a hard inquiry against your credit. Remember, just because you have a higher limit it doesn’t mean you should use it.
Finally, the easiest and most frugal way to help improve credit scores is to simply use credit cards less. This will decrease one’s credit utilization and therefore improve credit.
The Other Stuff
One of the best things one can do when trying to improve their credit score is to pay off credit card balances. This does not necessarily mean paying off the entirety of one’s debt at once, it means paying off as much as one can afford and not just the minimum limit. By doing this it will lower one’s monthly payments and decrease credit utilization, both of which are stellar for credit scores.
Another option when one is trying to drastically improve their credit score in a hurried fashion is to use a credit repair service. Consult your loan officer before doing this, as it may or may not be necessary.
Questions on FHA Mortgage Loans or how to further improve your credit score when applying for a mortgage? Call Treadstone Funding and talk to a Loan Officer today! (616) 774-9160