In our first blog post of the month we touched on the six most important considerations you need to keep in mind when preparing to buy a home. One of them was your credit score, more specifically how good, or not so good it may be. As we stated, a higher credit score makes you eligible for a lower mortgage interest rate. But how exactly do you improve your credit score?
First of all, know that it’s not an instantaneous process. Checking your credit score should be one of the first things you do when preparing to buy a home for this reason. If you’ve determined your credit score could use a little help, try these tips from FNB Fox Valley:
Pay down your debt- whether it is student loans, auto loans or credit card balances, pay them down. Start with the highest balance, and create a plan to chip away at your debt.
Check for errors on your credit report- credit reporting companies are not completely automated, which means there is room for human error, and false errors or marks against you can show up on your credit report. Search for these marks and get in touch with the company to get them taken care of.
Stay on time with payments- being late with a credit card or loan payment can make your credit score do a nose dive. Keep up with your payments to avoid a penalty or a ding on your credit.
Protect what you have- the last thing you want is to backtrack when you’ve made progress. So, go easy on the credit cards, keep up with your payments and don’t co-sign on anyone else’s debt. If they default, it will damage your credit score as a co-signer.
Again, improving your credit score takes time, so put these steps into action immediately. When you see improvement, then it may be time to talk about taking the next steps to purchasing a home.