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How to improve your credit score before applying for a mortgage

Updated: Nov 18, 2023

Improve Your Credit Score Before Applying for a Mortgage

How to improve your credit score before applying for a mortgage

If you are planning to apply for a mortgage, it's important to make sure your credit score is as high as possible. A good credit score can help you qualify for a lower interest rate on your mortgage, which can save you thousands of dollars over the life of your loan.



Here are a few tips to help you improve your credit score before you apply for a mortgage:


Check your credit report: The first step in improving your credit score is to know where you stand. You can get a free copy of your credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) once a year. To get your free annual credit report, you can visit AnnualCreditReport.com, call 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Review your report carefully to identify any errors or discrepancies that may be lowering your score. If you find any mistakes, dispute them with the credit bureau to have them corrected.


Pay your bills on time: Payment history is the most important factor in your credit score, so it's crucial to pay all of your bills on time. Set up automatic payments or reminders to help you stay on track. Late payments can have a major negative impact on your credit score, so it's important to avoid them whenever possible.


Reduce your credit card balances: High balances on your credit cards can hurt your credit score, so try to pay down your balances as much as possible. Aim to keep your balances below 30% of your credit limit. Reducing your balances can help improve your credit utilization ratio, which is a key factor in your credit score.


Don't open too many new credit accounts at once: Each time you apply for credit, it can have a negative impact on your credit score. Try to limit the number of credit accounts you open in a short period of time to minimize the impact on your score.



Credit Score Best Practices

 Credit Score Best Practices

In addition to these tips, there are a few other things you can do to improve your credit score:



Keep your credit accounts open: Closing a credit account can hurt your credit score, so try to keep your credit accounts open for as long as possible. This can help improve your credit history and boost your score.


Use credit responsibly: It's important to use credit wisely to avoid damaging your credit score. Try to only use a small percentage of your credit limit, and pay your bills on time and in full whenever possible.


Monitor your credit: Keep an eye on your credit score and credit report to catch any mistakes or issues that may be affecting your score. You can get your credit score for free from a number of sources, such as Credit Karma or your credit card issuer.


By following these tips, you can take steps to improve your credit score before you apply for a mortgage. A higher credit score can help you qualify for a lower interest rate, which can save you money over the long term.





 
Philip Bennett

Philip Bennett


Philip is the owner and Licensed Mortgage Broker at Bennett Capital Partners, Bus. NMLS # 2046828. He earned his degree in Accounting and Finance from Binghamton University and holds a Master's Degree in Finance from NOVA Southeastern University. With more than 20 years of experience, Philip has been a leader in the mortgage industry. He has personally originated over $2 billion in residential and commercial mortgages.


Learn more about Philip Bennett's background and experience on our Founder's page. Whether you're a first-time homebuyer or a seasoned real estate investor, our team is here to help you achieve your real estate goals. Don't wait any longer, contact us today and let us help you find the right mortgage for your needs.


Discover helpful tips and tricks on mortgages by reading our blog posts


What is a Credit Score? to learn what a credit score is and its role in the mortgage process. Click hereto read the full article


How to Qualify for Mortgage Loans with Low Credit Scores to learn more about mortgage programs for people with low credit scores. Click here to read the full article


Get Your Credit Score Checked for a Mortgage Loan to learn more how you can get your official mortgage credit score checked. Click here to read the full article


5 Ways to Boost Your Credit Score Before Applying for a Mortgage to learn best practices on what you should do before applying for a mortgage. Click here to read the full article





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