Having a good credit score is an essential part of not just getting a good mortgage rate, but also for qualifying for a mortgage in the first place. If your score falls below 600 then some immediate action is needed. Here are some steps you can take to boost you numbers.
Make payments every month
While this may sound like a no brainer some people don’t think that missing a $10 payment on a small balance is a big deal. It is! Make sure you always make at least the minimum payment.
Have at least 3 debts on your credit bureau
Having only one credit card can hurt your score since there isn’t much data. This is especially true if its maxed out. If qualifying for another loan is a problem then consider a secured credit card. These cards require you to provide some cash up front. Give them $500 and you get a credit card with a $500 limit that reports your payments to the credit bureau.
Pay down your debts
Yes it’s ironic but banks like lending money to people who don’t need it. If you’re maxed out on your cards it makes you look desperate and you get a low credit score. If you have low balances on high limits you appear much more solvent and will score high on the credit bureau.
Follow these simple tips to improve your credit score and seek the advice of an accredited mortgage professional.