Here are four things you can do to boost your credit.
Why is it so important for first-time homebuyers to have good credit? Well, the minimum credit score that most lending institutions are looking for to pre-approve a loan is 640. One of our banks in the area has a great first-time homebuyer program, but they want a credit score of 680! Here are a few tips to bring your credit score up to snuff so that you can successfully buy your own home:
1. Pay your bills on time. That sounds very simple, but every now and then, we all miss a bill payment. This can damage your credit, especially if you’re looking for a mortgage or some other big-ticket item.
2. Lower your credit utilization score. If you have a charge card with a $10,000 line of credit and you’re using $5,000 of that, you’ll have a deduction on your credit score because you’re using half of your available credit. Take a look at all the credit you have and be sure that you’re not using more than half of it.
“If you don’t have a credit card, get one from your local bank and start using it a little bit at a time.”
3. Check your credit score for free. Many people don’t know that they can check their credit scores for free; each credit agency will allow you to check your score once a month. Also, be sure to check for mistakes in your credit and have them corrected.
4. If you don’t have any credit, start establishing it now. Sometimes you can put your utility bills and rent into your credit history. If you don’t have a credit card, get one from your local bank and start using it a little bit at a time. Be sure to pay it off on time!
If you’re a homebuyer looking to improve your credit to get pre-approved for a mortgage, click here to boost your FICO score instantly. If you have any other questions about real estate, don’t hesitate to call, text, or email us. We’d be happy to hear from you.