Adapted from an article by Angela Colley | REALTOR.com
So you want to buy a house but you don’t think your credit score is going to get you approved by a mortgage lender. Here are some tips to improve that score in record time!
1. Pay down your balances like a ninja
Credit utilization (or the amount you can borrow versus the amount of debt you’re carrying) accounts for 30% of your credit score. The more available credit you have, the better.
Estimated time for improvement: One month
2. Get your bills current
Paying bills on time is the single most important factor in a credit score. When paid on time, your credit score will improve in one to two months. If you’re less than 30 days late and you can make the payment today, do it! Creditors don’t typically report until after the 30-day mark.
Estimated time for improvement: One to two months
3. Open a new account
Opening a new credit account will increase your total outstanding credit line (the amount you have available on that card).
Secondly, if you have only one type of credit card, opening another type of credit account can help your “credit mix,” a term the credit bureaus use to indicate whether a person can handle different kinds of accounts.
Be careful though – do NOT apply for a credit card when you shop, where the store offers a discount off your purchase. If you do, you’ll take a hit on the number of recent credit inquiries, and those are negative points to your score.
Estimated time for improvement: One to six weeks, based on processing and reporting your new account
4. Become an authorized user
Have a responsible partner or family member? Becoming an authorized user on one of their accounts will let you piggyback onto their good credit history. Just make sure the person you choose actually pays his bills on time and keeps the debts low.
Estimated time for improvement: Immediately
5. Don’t bother with additional payment histories
Asking your wireless provider or utility company to report your credit history has very little impact on your overall score, so it’s probably not worth the trouble.
So, if you really want that new house, buckle down and get busy. By implementing these tips, you can bring up your credit score in a relatively short amount of time.
When you are ready to buy, speak with Laura Van Meter. She will assist you in your new home search, from the very first step all the way thru your closing, when you walk away with the keys to your new home!
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