Before you apply for a mortgage, you must ensure that your credit score is in the best shape possible. Banks are simply not lending money to people with below “Grade A” credit scores. Here are a few tips to help you increase that score. Remember to take it slow and easy. It takes time to repair your credit and there are no magic bullet fixes. You must manage and take care of your credit over time. If you follow a plan and make good decisions, you can increase you credit score and be eligible for a mortgage loan that will ensure you get that dream home you have been searching for.
- Get a free copy of your credit report – The first step to fixing bad credit is to find out exactly where you stand. Get a copy of your report and scan it for errors or discrepancies that can be fixed.
- Setup automatic bill pay or payment reminders – Paying your bills consistently, on time is one of the biggest factors affecting your FICO score.
- Eliminate unwanted debt immediately – having no debt on your credit report will make you look responsible to lenders. It’s a tough job, but you need to eliminate credit card debt as best a possible.
Some quick tidbits you should know:
- Always get current on missed payments first
- Paying of a collection debt will not remove it from your report
- If you are having trouble, see a credit counselor and make a plan
- Always keep credit card balances as close to $0.00 as possible
- Pay off debt when possible, rather than moving from card to card
- Don’t close unused cards and don’t open new cards to try and manipulate your score
- You can check your own credit without fear it will hurt your score as long as you order directly from the credit agencies and not through a 3rd party
- Use your credit cards as much as possible while still being able to pay them off
Fixing your credit is much like losing weight. You have to find out where you are, make a plan to get where you want to be and then diligently stick to that plan. If you fix the errors and then follow good credit guidelines you will improve your score and be able to get a mortgage on that dream home you have been hoping for.