Like most homebuyers these days, it’s very likely you’ll find yourself needing the financial assistance of a mortgage lender to make your next home purchase a success. To give you a leg up when dealing with your lender of choice, we’re going to help you whip your credit score into shape with these 3 ways to quickly boost your credit before buying a house in East Hanover and Morris County.
Check Your History
Before we go any further, the first thing you want to do is request your free annual credit report from a major consumer credit reporting agency.
The intention here is to comb through the resulting consumer credit report for any errors or even debts you may have forgotten, and get these issues resolved. Contacting the credit reporting agency to dispute any errors will ensure you aren’t being held back when applying for a home loan based on incorrect information, which is not unheard of. Second, there’s always a chance that you had lost track of your financial obligations in the past and left an outstanding debt that has slowly chipped away at your credit score.
Doing everything you can to clean things up prior to moving forward will put you in the best position to then begin the process of either repairing or maximizing your credit score.
Budget and Start Making Micropayments
With your history sorted out, it’s time to update your budget to try saving as much money as possible while paying down debts and making things look better on paper.
If you’re looking to improve your credit score, don’t just wait until your monthly credit card statements arrive to make payments. Instead, be proactive about paying off your credit cards by making what are called micropayments. These are smaller amounts of money applied to your account throughout the month rather than a lump sum paid all at once.
This helps your credit score by lowering what is referred to as your “credit utilization rate.” Credit utilization is calculated by taking the amount of credit available to you and seeing how much of that credit you’re using up over time. By keeping this utilization low, it shows you have a larger financial buffer zone available to you if needed.
We aren’t looking to completely pay off any and all debt, but minimizing it is the ultimate objective. Oftentimes, credit cardholders are under the impression that keeping their accounts completely clean – without any balance – is the best way to boost your credit score, and this isn’t necessarily the case. Credit is about managing your finances appropriately, living within your means, and displaying your ability to do so over a long period of time.
Raise Your Credit Ceiling
Now that we have established that credit utilization plays a large role in how your credit score is figured out, we can try finding ways to enhance that credit utilization.
The easiest way to accomplish this is by finding ways to give yourself access to more and greater lines of credit. One way to do this is by becoming an authorized user on someone else’s card or account. This immediately opens that available line of credit to you and thereby improves your credit utilization rate.
Another way of achieving this goal is through contacting your credit card companies and requesting credit limit increases without a hard inquiry. The key here is making sure no hard inquiries are done since these can lead to decreasing your credit score.
With these two methods, you’ll quickly be on your way to a better and more enticing credit score for mortgage lenders.
Advice to Boost Your Credit Score Before Buying a House
If you’re looking for ways to boost your credit score before buying a house in East Hanover and Morris County, contact our knowledgeable team today at (973) 887-2500!