It is already given that having a poor credit score can hamper a home buyer’s chances of getting qualified for a mortgage loan. If this is your case, don’t be discouraged. You can still fix your credit rating as long as you manage it responsibly over time. Remember that improving your credit score won’t happen overnight and there’s no quick, effortless way to fix it.
First things first, it is helpful to know what makes up your credit score, take a look at the chart.
The payment history is your consistency of making payments on time, this takes up the biggest percentage of your credit score. Needless to say, making payments on time plays a major role in your credit rating. The total amount owed also includes the ratio of what you owe to the amount of credit that’s available; your credit history is the length of time you have been using credit; the types of credit in use include credit cards, installment loads, finance company accounts, and others; and new credit accounts are the accounts you’ve recently opened.
What do you need to do improve your credit score?
- Check your credit report regularly. You can request a free credit report and check it for accuracy. You can also review why you have a poor credit score and focus on the areas that need the most improvement.
- Pay your bills on time and do it consistently. If you have to set up a reminder so you won’t miss your due, do it. On-time payments are the biggest contributing factor to your credit rating. If you have missed payments, get current.
- Pay your monthly balances in full. Come up with a good payment plan.
- Reduce the amount you owe. If you have to stop using your credit card, be it. If you need to borrow, try to keep your account balance around or below of your credit limit.
- Do not close unused accounts, it may affect your credit score.
- Do not open new credit cards to increase your available credit, it will negatively affect your credit score.
- Do not make big purchases.
- Seek a credit counselor if you have trouble making both ends meet.
Building your credit score takes discipline and consistency. If you follow the guidelines above, you can improve your credit rating.
Need Help with Financing?
Get a FREE Loan Pre-qualification. Pre-qualification acts as a dry run of the loan application process. The mortgage lender will use details you provide about your credit, income, assets and debts to arrive at an estimate of how much mortgage you can afford. The whole process may take only minutes or a few hours at most, and is FREE.
Read more: How Much Can You Afford For a Home?
Looking to buy? Are you a first time home buyer? We can help! The J Michael Manley Team go above and beyond to help you find the perfect home, from searching the right property that meets your real estate needs until you finally sign the deal. We will walk you through the process and make sure that you get the best deal possible. Are you ready to find the right home?
Contact us or Call us at 864-881-1258