If your credit score isn’t something you’ve given much thought to, it’s time to change that when applying for a mortgage. After all, your credit score can affect whether you get a mortgage and how good your terms will be. A good credit score can be the difference between 3% and 7% interest rates. Read on to see how you could raise a disappointing credit score into one that will make a mortgage broker say yes.
Pay Back Credit and Loans
Take a hard look at your existing credit accounts and see what you can pay down. Once you get your regular monthly bills covered, make it a priority to pay off your credit loans. In addition to credit cards, pay down other outstanding revolving debt . If you have smaller credit cards that you can pay down first, go ahead and do that. Then, your report will reflect that certain accounts are paid off, closed, and in good standing.
Pay On Time
Whatever you do, don’t skip a payment! Being aware of your due dates is a step in steadily raising your credit score. After all, those late payments can be reported to the credit bureaus and will ping against your credit rating. If you often forget things, make it easy on yourself by setting up automatic payments. With automatic payments, you’ll never have to worry about being late again.
Get a Side Hustle
Do you have time to get a side hustle or a second job? Consider taking on a temporary second form of employment to focus on paying down your debt. Take the payments from this additional work and place them in a separate bank account just to pay down your credit cards and loans. That way, you won’t be tempted to use this extra money for other frivolous things. Bringing in extra money will help you pay down your credit obligation faster, which will be reflected in your credit score.
Transfer Balances
If you have high-interest rate credit cards, consider consolidating them to a lower-interest rate one. Remember, interest rates can increase your monthly payments and make it harder to pay down your obligation faster. Some credit card companies will offer a transfer of balances when you first apply to them. However, if you had certain credit cards for a while, you can call the credit company to see if you can still make such a transfer.
Finding the right mortgage for your home purchase involves many steps. One of those steps is ensuring that your financial health is on track. A mortgage lender will see where your credit rating stands and analyze general activity on your credit report. You can help your situation by lowering your credit score and keeping your account in good standing. By following this helpful advice, you can have the home of your dreams in no time.
