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Sunday, December 17, 2017

Ways To Boost Your Credit Score




BOOST YOUR CREDIT SCORE


For any major purchase, such as buying a home, your credit score is very important. Your credit score can determine whether or not you can even qualify for a home loan, as well as your mortgage insurance requirements and your interest rate.

INTEREST RATES
The interest rate you pay for the money you borrow is determined largely by your credit score. Many Lenders set a hard and fast rule with their lending policies. For example, a Lender may determine that the lowest mortgage interest rate possible is available to customers with a credit score of 700 and above. If your credit score is 695, those five measly points can cost you thousands of dollars over the life of your mortgage loan.

FHA LOAN
I applying for an FHA loan, you will be required to have a minimum FICO score of 580 to qualify for a low down payment loan option. If your credit score is below 580, you may still be able to qualify for an FHA loan, but be required to pay a larger down payment.

Learn more here about the Mortgage Loan Process.

CHECK YOUR CREDIT SCORE
Be sure to pull your credit score once a year and check it for any discrepancies. You can do a lot of work yourself to remove inaccurate records or incorrect postings on your credit. Look for errors on your report, like accounts that are not yours, late payments that were paid on time, debts you paid off that are still showing up, or old debts that should not be on your credit report any longer. You will have three different FICO scores comprised of the three major reporting bureaus: TransUnion, Experian, and EquiFax.

Be sure to discuss questions you have with your Lender or financial advisor. If you are just starting the process and need a Lender recommendation, work with your real estate Agent for Lender referrals.



RAPID RESCORING
If you are looking for a quick credit score boost, your Lender can help you speed up the process. Rapid rescoring can increase your credit score within a few days by quickly correcting errors or paying off balances. You will need to do this through a Lender who is a customer of a rapid rescoring service. There is a fee associated with utilizing this service, but this process can result in cleaning up your credit score and can save you hundreds to thousands on your mortgage loan.

PAY DOWN DEBT
After reviewing and fixing any errors on your credit report, next you will want to pay down debt. Start with paying down (or paying off) credit card balances. Paying down credit lines can boost your credit score and bump you into the next tier for a better mortgage interest rate or improving your likelihood for loan approval.

Always, always, always pay your bills on time. Even if you have paid bills late in the past, it’s never too late to improve your credit with ontime payments and keeping balances low going forward.

DON’T OPEN NEW LINES OF CREDIT
Open new debt only if you really need it. It is not advisable for you to open any new lines of credit. If looking to purchase a home now or in the near future, consult your Lender before you open any new lines of credit as this can severely (and even negatively) impact your credit score and your ability to purchase a home.



DON’T CLOSE OLDER ACCOUNTS
Conversely, you may be tempted to close old credit accounts that are no longer used. It is not ideal to close any old lines of credit when attempting to purchase a home as it may have a negative impact on your credit score.

TO RECAP
The first thing to do is know your credit score and work immediately on any improvements. Be sure to discuss your credit score, credit report, and credit improvement plan with your Lender or financial advisor. There is a lot you can do immediately or in the short-term to improve your credit score, allowing you to qualify for a lower mortgage interest rate and saving you money now and well into your future.

Still looking for a Lender? Call us today to learn more and get started. (800) 461-4152


Still looking for a real estate Agent? We can help you there too. Call us today. (801) 478-4545

Read here to learn more about Finding The Right Agent For You.


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