So you’re ready to make the biggest purchase of your whole life – your very own home. The only roadblock you have is your credit score. You may have not incurred any debt in your life, and if you do, you always pay your credit on time. However, mortgage originators are more results-based and would not back down on any limit they’ve set on you. What’s a man or woman like you supposed to do? Here are a few tips on how you could improve your credit rating without a sweat:
1. Can the credit applications. This is one of the immediate steps you can take when trying to improve your credit rating. And it makes sense after all—if you want your credit score to improve, don’t try to borrow money anymore!
2. Pay on Time. Nothing could be better than paying all your bills on time. Do not underestimate the wonders of paying your bills on their due dates as it reflects that you’re a responsible borrower.
3. Deactivate all unused credit cards. Get rid of credit cards that you don’t use. It will only reflect negatively on your credit report. Make a hole on the magnetic black strip at the back of the card to ensure that it will not work anymore when used. If it’s stolen, you will also be sure that it cannot be used other people.
4. Have your credit score repaired! The US Federal Trade Commission advises people to review their credit report regularly to ensure that all information on it is accurate and updated. Request a free copy of your credit report from major credit bureaus to check it for errors. Ask to have late payments revised especially when it has been listed incorrectly on your account records. Dispute them with the reporting credit agency and bureau.
Remember that you can always pay a larger down payment if you simply cannot wait to get a hold of your keys to your first property soon. According to Abby Hayes of Daily Finance, you can always put more money down to basically “offset a weak credit score.” With more equity deposited for your home, your risk as a borrower becomes lesser in the eye of the mortgage lender. Hayes also suggests resorting to non-conventional loans (i.e. Veterans Affairs loan, US Department of Agriculture loan and Federal Housing Administration loan) and working with a homeownership counselor who can advise you get your credit rating up. Or you can always apply for a mortgage from a smaller financing institution.