You need to get your mortgage application approved if you are planning to buy a home through credit. However, the application is largely dependent on your credit score. Also, your score will influence the interest rate, which you will be charged on top of the mortgage. As such, it is crucial to ensure your rating is impeccable before embarking on buying a home.
So, what are some of the tactics you can employ to strengthen a poor score or maintain an impressive credit score while preparing to buying a house?
Examine your credit score and have any issues fixed
You need to get a copy of your credit reports from the main credit bureaus so you can search for are any omissions, incorrect information, and so on, which you then need to have fixed. Each of the 3 bureaus is required to issue you a free copy of your report once per year, so take advantage of this. It is estimated that a whopping 25% of the mortgage applicants whose requests are rejected each year have issues with their credit reports. Follow the step-by-step guides provided by each of the bureaus to fix the issues, or better yet, engage a professional. Adhere to the process and keep copies of all disputes. You should get a response within 30 to 60 days after you make a claim.
Stay up-to-date on your payments
As simple as it may sound, you must ensure that you never miss a payment or pay late if you are intending to keep an excellent score or improve a poor or average one. In addition to being on top of your payments, you can repair a bad score by engaging professionals to help boost your score, for example by selling you tradelines and offering other vital guidance. You cannot go wrong with Boostcredit101 in improving your score and putting you on the path to realizing your dream of buying a house through a mortgage.
Exceed the minimum payments
Do you know you can significantly improve your score by paying more than the minimum amounts on your revolving monthly credit products? Well, this is a beneficial strategy, as it not only clears your loans faster, but it also saves you interest that you would be paying to the lender. Anyone reviewing your credit history may not consider paying the bare minimum amount to be a sign that you are a serious borrower.
Pay off all your card balances and keep the accounts
As with other credits, ensure you are current on your credit card balances by paying them off. Also, as you plan on getting a mortgage, do not close any of those credit card accounts. If you close any of the cards, you may lose part of your credit history and even reduce your total credit limit, thereby raising your debt ratio. These will have a negative effect on your score, which you cannot afford at such a time.
Avoid huge credit purchases
You should avoid any huge alterations to your finances shortly before taking out a home mortgage. Some of the ways to ensure this is to put off buying a car on credit or to postpone that expensive holiday or shopping on credit until you are done with your mortgage approval. Lenders and specifically banks do not like seeing any huge changes to your finances prior to approving your loan application.
The process of buying a house through a mortgage should start long in advance and involves you building your score or maintaining that stellar score that you already have. You can do this by checking your credit report and disputing any issue, and by keeping your accounts current, among other strategies.