If you’re buying a home, you probably already know that lenders want to see that you’re capable of repaying a loan before they’ll give you money to do so – and that means they want to evaluate your payment habits, find out whether you have revolving credit lines, and check on your overall credit health.
Even if you don’t have perfect credit, you may still qualify for a loan… but it’s best if you brush it up as best you can before you apply for a mortgage.
How to Improve Your Credit Score Before You Buy a House
You’ll need an accurate picture of your current credit situation before you can determine what to do next.
The Federal Trade Commission suggests using AnnualCreditReport.com to get your free copy (you’re entitled to one per year under federal law).
Once you receive your credit report, go over each entry and ensure that it’s all correct. People make mistakes, and sometimes companies don’t remove old, negative items when they should.
If you find errors, get in touch with the credit bureau reporting them.
Boosting Your Credit Score
One of the best ways to boost your credit score is to pay down your credit card debt. The ideal number for lenders is 30 percent; that means you should be using less than 30 percent of the credit that’s available to you.
If you have numerous small balances on a variety of credit cards, it may be a good idea to consolidate them on one or two low-interest cards. In some cases, the way your debt is spread out has an effect on your credit score.
For example, if you have $900 worth of debt on a card with a $1,000 limit, you’re using 90 percent of that credit card’s limit. Transferring that $900 debt to a card with a $10,000 limit will show that you’re not close to “maxing out” your cards, which can give your credit score a boost.
Are You Buying a Home or Horse Property in Lake City?
If you’re purchasing a property in Lake City, Florida, we can help.
Call us at 386-243-0124 or contact us online. We’ll begin looking for the perfect property for you, whether it’s a new home, an equestrian property or a piece of owner-financed land in North Florida.
