4 Ways to Boost Your Credit

Having a higher credit score can help with major purchases such as buying a house. But how do you improve your score to grow it? Try these four tips to boost it before applying for a loan.

Fix Credit Errors

Don’t wait for your mortgage lender to check your credit history and let you know of any errors. Request a credit report from each of the three major bureaus every year (Equifax, Experian and TransUnion) and review the report for accuracy of your personal information, credit limits and the open/closed status of each credit account. Dispute any errors immediately to remove them from your record.

Ask for Forgiveness

If you do have any red flags on your credit, try to clear them up. Negotiate paying an old debt with the creditor if they will mark your account “paid as agreed”. If there is a late payment on a long-held account, write the creditor and acknowledge your otherwise good history and ask for a goodwill adjustment that will wipe that red flag from your credit report.

Make Strategic Repayments

You may not have the means to pay off all your credit cards right away, but it’s important to have a strategic plan in place to start paying them off. Look at each of your balances and interest rates and start focusing on paying those bills with the higher interest rates while paying the minimums on the other accounts. Once that initial account is paid off, take the money you were paying towards that account and apply it to the next highest balance and interest rate account and keep going until all your debt is paid off. You can also demonstrate restraint to lenders by keeping each card balance below 30 percent. If your credit card debts are higher than that percentage, pay the balances on these accounts first to reach a more desirable ratio that is attractive to lenders.

Increase Your Credit

Another way to reduce your debt-to-income ratio is to ask for an increased limit. Doing this can help you end up with a  lower debt-to-income ratio, if you restrain from future spending, which accounts for up to one-third of your credit score.

If you have any questions about your credit and how it could affect your application for a home loan, we have a list of preferred lenders who we know and trust who would be happy to assist you.

(Information from Cendera Funding)

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