While there are many factors that can affect which home you end up purchasing at the conclusion of your home buying process, your credit score is one of the most important pieces of the puzzle.
This three-digit number may seem insignificant. However, maintaining a good credit score will help you purchase a home that’s not only adequate for your needs, but also one that you love for many years to come.
How to Improve Your Credit Score
1. Be Smart with Credit.
There’s no doubt about it, credit cards are an integral part of our lives. We use our cards to pay for nearly everything.
Unfortunately, many people are overly reliant on credit card spending and can find themselves in a tricky situation as they fall into debt or develop other credit-related issues.
Your credit habits factor heavily into your credit score. Therefore, you should treat every purchase as an opportunity to show lenders how responsible you can be with your credit card payments and usage.
Furthermore, you’ll want to think twice before opening any new credit when you start the homebuying process. Again, lenders want to work with applicants who stick to a few credit sources, not those who use credit for anything and everything in their lives without regard for whether or not they’ll pay back their debts.
2. Be Timely with Bill Payments.
Any bills you may have need to be paid on time. Your credit score is heavily reliant on your payment history and payments made a month or more past their due date may cause a triple digit change in your credit score. This is a huge blow to your credit score and will likely place you in a much worse position which, in turn, will set you up for a much worse mortgage rate.
There are many ways to ensure you stay on top of your bill payments. One of the most popular methods is to use a simple calendar system. By entering in the due dates into your virtual or paper calendar, you can keep yourself on track, no matter how busy life gets.
3. Review your Credit Report with a Critical Eye.
As irritating as it may be, errors can happen frequently on credit reports. Incorrect addresses, duplicated information, and other issues can all affect your credit report, leading to a change in your credit score.
Therefore, you want to make sure you frequently monitor your credit report to ensure that any changes are appropriately reflected online. Should you find any problems or errors, each of the three credit bureaus has a complaint system, which is detailed on their respective websites.
Are you Ready to Start the Homebuying Process?
If the time has come for you to embark on the homebuying journey, you don’t want to go it alone!
Consider consulting with a mortgage professional who will help you purchase the home of your dreams, regardless of your credit score. These housing experts will be able to guide you on your quest and before you know it, you’ll be sitting in your new home, ready to take on your next adventure!