Credit score not where it needs to be to secure a new home mortgage? Don’t fret. There are a few techniques you can use to raise it! A good credit score is important when buying a home to get a better mortgage rate. Better mortgage rates mean you’ll pay less in interest over the life of your loan – saving thousands.
Here are some tips to help with boosting your credit score to get that better rate:
- First, reduce your debt – pay it down to improve your score. Make consistent payments on all of your debt including both loans and credit cards.
- Never max out your credit card, and only charge what you can pay off each month if possible.
- Next, check your credit report with all three credit bureaus and look for errors that need correcting. Dispute these and work on fixing anything that is not correct.
- Try to keep your debt to income ratio below 43% – this means your monthly expenses shouldn’t total more than 43% of your monthly income.
Get rid of unnecessary expenses.
The most important thing you’re trying to do is demonstrate solid payment history. This is key to boosting your credit score. You can start small: take a small loan from your bank, put it in savings and use that to pay the loan back over a year to demonstrate payment history. Then, use this list of tips and you’ll see a change in your score over time.
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