Looking to Buy A Home? | 3 Tips For Improving Your Credit Score

Congratulations! You have decided to purchase a home. It is a very exciting time; however, it can also be very stressful. You begin questioning if your credit score is in good shape? Will this slowdown or stop the process of buying a home altogether? How can I improve my credit score, fast?

First of all, do not panic! Many consumers are worried about their credit score. Trying to improve one’s credit score is a common concern for a lot of buyers. Check out these tips on how to approach any issues and improve your credit score so when mortgage lenders look at your financials you are in a much better position than you were prior.

3 Tips on How to Improve Your Credit Score

  1. Pay Off or Lower Debt

Paying off debt is one of the quickest ways to improve credit scores. Credit utilization makes up 30% of your credit score. Therefore, try to pay off your balances or keep them predominantly low. With the holidays around the corner, do not foolishly dig yourself in more debt because you are shopping for friends and loved ones. Keep it simple and keep a budget as you have big plans to purchase a home.

  1. Stay Current on All Accounts

Do you have any accounts that have late payments? Catching up on all delinquent accounts and outstanding fees can improve a credit score pretty quickly. Once you take care of those unpaid dues, it is vital that you pay your bills on time. By staying on top of payments, you will continue to increase your credit score.

  1. Plan Accordingly

When you are preparing to buy a home, there are a few things you should and should not do. You should be mindful of any additional large purchases you plan on making. For instance, this is probably not the best time to buy a car. Every event you apply for credit can cause a decrease in your credit score which is not what you want right now.

It is also not an ideal time to open or close any accounts. You may want to shut down an account once you have paid off the balance, but you should ensure that this will not affect your credit score first. Most of the time closing an account will not improve your credit score, and by leaving the account open, you can continue to increase your score by making timely payments.

Want more? We’ve put together a downloadable list of 12 Things Not to Do When Getting Approved For a Home Loan.

With these credit improving tips you should be well on your way to becoming a new homeowner! If you are still seeking further guidance, call us at 480-759-1500 or email matt.askland@cardinalfinancial.com and we’ll be happy to assist you.

Happy house hunting!

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