6 Ways To Improve Your Credit Score

Poor credit is one of the most common reasons that families put off their homeownership dreams. If you are dealing with vast amounts of debt or credit issues, it can feel overwhelming. Here are six ways in which you can improve your credit score today!  

1. Pay Off Some Of Those Outstanding Balances

Large balances on your credit card will weigh your score down heavily. Even if you are current on your payments, your lender will see the large balance as a higher risk. This also will cost you much more in interest.  The lender wants to see a balance of less than 30% of your entire total allowable balance. If you cannot pay it off within the same month, it is recommended to only use cash to pay for it.   

2. Make On-Time Payments (Especially Housing Payments)

 Making on-time payments is critical to maintaining a healthy credit profile. Missing your mortgage payment one time can drop your score as much as 100 points! If you are struggling to pay your bills, look to cut other expenses before missing any credit payments.  

3. Don’t Open New Cards

Every time you go to the store, people are trying to entice you to open new credit lines. No matter how good the deal sounds, don’t open store credit cards. This will result in a hard inquiry on your credit and isn’t worth the interest you will pay.     

4. Don’t Close Any Cards Prematurely

There is no better feeling than wiping the balance on your credit cards. While it may be tempting to close the account altogether, you must keep it open. Lenders look at closed accounts as a negative thing. It will also bring down the overall age of your active credit. Keep it active and spend a small amount on the cards each month. Just ensure that you pay off balances right away.   

5. Check For Inaccuracies On Your Report

Inaccuracies on your credit report can decrease your score drastically. Whether it is missed payments, collections, or credit pulls, your score can increase hundreds of points by getting those items removed. This can impact:

  • Your eligibility
  • Interest rate
  • Type of loan product
  • Buying power

 6. Avoid Unnecessary Credit Pulls

 Every time you go to the store, people are trying to entice you to open new credit lines. No matter how good the deal sounds, don’t open store credit cards. This will result in a hard inquiry on your credit and isn’t worth the interest you will pay.  

While we cannot repair your credit, we can help guide you and get your credit mortgage ready. If you have been thinking about buying or refinancing a home and are worried about low credit, click here and speak with one of our mortgage specialists. They can educate you on precisely what you need to make your dreams come true.