Boost Your Credit Score When Buying a Home ? Carthage Savings & Loan
3 Easy Ways to Improve Your Credit Score When Buying a Home
There are many steps involved in buying a house, and odds are that you’ll need to take out a home loan. But your chances of securing a mortgage heavily depend on the state of your credit. If you don’t think your credit score is high enough for approval, Carthage Savings & Loan has put together tips to help you give it a boost and move the home-buying process along.
1. Pay down your credit card balance(s).
One of the biggest factors in determining your credit score is the credit utilization ratio, which compares the balance on your credit cards to your credit limit. A low number means that a small balance remains on your cards, which yields a higher credit score. This ratio should not be overlooked, as it is the second biggest influencer to your credit score after your payment history. And since credit utilization ratios account for roughly 30% of your credit score, you should pay off as much of your balance as possible before applying for a mortgage loan.
2. Dispute errors on your credit report.
When you view your credit score, make sure to go through every line thoroughly to ensure everything is accurate. If you find a mistake, such as a late payment or wrong balance, it can negatively affect your score. In these cases, contact the agency that is responsible for the account and dispute the charge. Credit bureaus have 30 days to investigate the claims that you are disputing, and if they cannot find evidence that it is accurate, it will be deleted from your report. This will go a long way in increasing your credit score, and the time you spend double-checking your report will pay off.
3. Contact collection agencies to arrange “pay to delete” payments.
Another way you can boost your credit score is by reducing the balances of any collections bills you may have. The best way to do this is by contacting the collection agency and requesting a “pay for delete” arrangement. This means you’ll agree to pay off the entire amount owed – as long as the account will be completely removed from your credit report. In some cases, you may be able to negotiate a lower amount because you are willing to pay it all off at once. After you have contacted the agency, make sure you receive a “pay for delete” letter, which puts your agreement in writing so you can show it to the credit bureau.
Get Your Loan Approved
Don’t let bad credit stop you from getting approved for a home loan. By following these steps, you can quickly increase your credit score and be on your way to financing your dream home. If you have not decided on where to secure financing for your future home, visit Carthage Savings & Loan. Our variety of mortgage and home loans cover people in many different situations, so you can find the one that best fits your own. Find your local branch in Upstate New York and stop by to talk about your options with a helpful member of our staff today.