If you’re thinking about buying a home and you’ve done any research into the matter, you probably know about the importance of a good credit score. Along with putting you in the best position possible to get a home loan, solid credit helps you secure a more optimal mortgage interest rate. But what if your credit score isn’t quite what you want it to be? What if it’s just plain bad? Either scenario can be worrisome to someone considering a home purchase, but don’t let it be. Here are a few trips and tricks on how to raise your credit score in a hurry.
1. Pay All Bills
The quickest and easiest way to boost your credit score is to simply pay your bills on time. This includes both your regular monthly payments and past-due bills that have possibly even gone to creditors. A history of late payments (or non-payments) can do major damage to your credit. That good news is it’s not irreversible. After just one month of on-time payments, your credit score can get a major lift.
2. Don’t Close Existing Lines of Credit
If you have one or more credit cards, resist any temptation to close them out. Doing this will lower the average age of the accounts listed on your credit report. The amount of time you’ve had a credit card, or credit in general, plays a role in your credit score. In short, the longer, the better. This is assuming, of course, you have a history of making your monthly credit card payments on time.
3. Ask for a Higher Credit Limit
This one may sound confusing at first, but it actually works. By calling your credit card company and asking to have your credit limit raised, you can actually improve your credit score. Who knew, right? The basic concept here is called credit utilization. It’s a fancy way of describing the percent of your available credit that you actually use each month. With a higher credit limit, your credit utilization percentage will go down – assuming you continue to make the same monthly purchases with your credit card. As a result, your credit score will get a nice shot in the arm.
Feeling better about your credit situation? Even if you’re not just yet, you at least now have a better understanding of how to raise your credit score. Also be sure to ask your Fairway of the Carolinas loan officer about our internal Creditool team. These highly qualified credit analysts will assign someone to your credit report and draft a credit improvement action plan tailored for you. And the best part of all is it’s completely free. Let us pilot your home loan and guide you along the path to better credit. We’re always available to answer any questions you have. Feel free to call or connect with us in the comments section below.