3 Ways to Improve Your Credit Before Buying A New Home
When you’re considering buying a home, there are a lot of things in your life that you have to get in order before you can make this dream become a reality. One of the things that’s going to have a big impact on your ability to get a home at an affordable price is your credit score. But for many people, their credit score has taken a hit, which can be a big hurdle to overcome on the journey to owning a home. To make this task a little easier on you, here are three ways you can improve your credit before attempting to buy a new home.
Double Check Your Credit Reports
One of the first things you should do when trying to get your credit score up is double check that your credit reports are accurate. According to CreditRepair.com, many people actually find discrepancies on their credit reports that could be having a major impact on their negative credit scores. These could be mistakes as small as transposed numbers or as big as identity theft. So before you take extreme measures to change your spending habits, take the time to comb through your credit reports from each of the three credit agencies and ensure that all the information presented there is accurate.
Pay More Than The Minimum
If you’re currently working toward paying down your debts and have only been meeting the minimum payment each month, one way you can give your credit a boost is to start paying just a bit more. According to an article written by Trulia for Forbes.com, paying the minimum payment isn’t necessarily a positive indicator that you’re good at managing your credit. So if you’re able to pay more than that minimum amount, even if it’s just a tiny bit, that can help improve your credit and be a positive note regarding paying back your debts. Not only this, but it will also save you money on interest in the long run and reduce the amount of time that you’re working to pay these debts back.
Don’t Apply For New Lines of Credit
According to Claire Tsosie, a contributor to Nerd Wallet, if you’re planning to apply for a home loan soon, you should stop trying to get other lines of credit opened for yourself. To give yourself the best chance to get a good interest rate on your mortgage and be approved for your home loan, you want your credit to be as clean and positive as possible. When you apply to open new lines of credit, your current credit score can take a hit, so wait to get a new credit card or try for a new loan until after you’ve been approved for your home loan.
If you’re wanting to improve your credit before you start seeking a home loan, use the tips mentioned above to help you make the adjustments to your credit that you need.