When you’re buying a home, lenders are going to look at your credit score to determine how much money – if any – they should let you borrow. That means you need to do the legwork of improving your credit score as much as you can before you apply for a loan. That way, you’ll qualify for better terms and interest rates.
So where do you start?
How to Boost Your Credit Score So You Can Get a Mortgage
The first thing you need to do is get a copy of your credit report. You’ll be able to see all your credit accounts in one place. If you see anything that doesn’t belong there – an account you never opened, for example, or a payment reported late when it really wasn’t – open a dispute. Creditors have to pay attention when you argue about something on your credit report!
Related: How to check your credit before you buy a home
From there, figure out where you stand.
To boost your score, use these tips:
- Ask your creditors to raise your credit limits, which improves your debt-to-utilization ratio
- Pay all your payments on time
- Try to pay down as much of your debt as you can
If you have high-interest debt that’s eating up more of your income than it should, you might want to talk to a financial adviser about taking out a debt consolidation loan. That could end up putting more money in your pocket and help improve your credit score by changing your balances and making the types of credit you have more robust.
Are You Buying a Home Along 30A?
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