You might think that getting your credit score up high enough to get approved for a mortgage is out of your reach, but the truth is that with a little commitment and planning, a year can be more than enough time to improve your score by more than you might realize. Here are five simple ways you can build your credit up over the next year to help you get ready for homeownership, presented by the Core Group.
Start Monitoring Your Score Closely
If you’ve never paid attention to your credit score, now is the time to start. You can pull your report for free at annualcreditreport.com to get an idea of where you stand. If you’d like to take it a step further, you can sign up for a credit monitoring service which will help you stay on top of changes to your score as they happen.
Make Payments on Time
One of the best things you can do to improve your credit is make your bill or credit card payments on time. Paying late will take points away from your score each month, causing you to have to do more make up work in the future. If you have trouble remembering, set up autopayments to come directly out of your bank account.
Increase The Amount of Payments
If you’re in the habit of paying the minimum payment on your debts, any increase you can make will benefit you over time. Even small extra payments will help to decrease the amount of interest you pay in the long run.
Pay Off Old Debts
Once you have your credit report in hand, you can see every debt that has been reported. Getting the old ones off of your report can help you boost your score, but make sure they are legitimate before you pay them. if you see any that you have already paid, or that are older than seven years, try disputing them through the credit bureaus before you pay them. If the credit bureau finds out that the debt is not valid, they will remove it without you having to pay.
Use Credit Wisely
How you use your available credit is one of the many factors that impacts your credit score, so any credit cards you have open should be used wisely. If you do have to use them, make sure to pay them as soon as possible to avoid hurting your debt to credit ratio.
If you’ve put in work to get ready to buy a home and you need to start looking for the right home for you, the Core Group can help. Click here to contact us and start looking at homes today.