Love Where You Live ....................Licensed in MA & NH
Higher FICO scores (or credit scores) are a necessity when buying a home. Credit scores range from 300 to 850. Any score above 670 is considered very good to a mortgage lender. Without an established consistent record of credit however, often new prospective home buyers find themselves with a too-low score, hindering their ability to secure approval for a mortgage.
This is not permanent! There are ways to boost your credit score and qualify for a better mortgage rate. Better mortgage rates mean you’ll pay less in interest over the life of your mortgage loan – and this could save you tens of thousands of dollars.
Tips to boost your credit score:
Check your credit report with all three credit bureaus and look for errors that need correcting, disputing anything that is not correct
Reduce your debt – when you pay down your credit cards your improve your score
Make consistent payments on all of your debt, both loans and credit cards
Never max out your credit cards and only charge what you can reasonably pay off each month
Try to keep your debt to income (DTI) ratio below 43% – as in, your monthly expenses shouldn’t total more than 43% of your monthly income
Some of these techniques will show a change in your score in a matter of days and some can happen slowly over the course of a year of consistent behavior. Demonstrating solid payment history is key to boosting your credit score.