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What Is The Fastest Way To Raise Your Credit Score To Buy A House

Guest Post | Jul 28, 2021

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When buying a home, there are plenty of important factors a lender will consider when deciding whether or not to give you a mortgage. They will think about your income, your down payment, your other debts, and of course, your credit score. Your credit score is essentially a snapshot of your history as a borrower. The higher the score, the less risky you are to lend money to, in most cases.

While most with an average credit score or above average will be fine, those who are below might experience a bit more trouble. But thankfully, you aren’t doomed to have a bad credit score forever. Read on as we go over some of the best ways to quickly raise your score to buy a home.

Remove Negative Items on Your Credit Report

Perhaps the fastest and most affordable way to raise your credit score is to remove negative items from your credit report. These generally include collections and inquiries. While each one might only hurt your credit a bit, if they pile up, it can have a major impact.

Be sure to go through your report and ensure you do all you can to get these negatives removed. Also, mistakes are common on a credit report and could be the reason your credit is lower than it should be. You should be checking your report at least once a year if you feel your score is too low, to make sure there are no negative or incorrect items on your report.

Pay off Your Existing Debt

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Next, you need to make an effort to pay off any outstanding debt that you have. If you continue to miss payments and not pay off your debt, it will be hard for a lender to trust you with a mortgage, if you can’t even pay off your credit card bills. The more debt you have, especially debt that is unpaid, the less likely you are to get a good mortgage.

You may need to make some sacrifices, but it will be worth it to get a home you love. While the second you pay off your debt you won’t see your score skyrocket, it certainly can happen quickly.

Pay Your Bills on Time

Another way to show creditors you are worthy of a higher score is by paying your bills on time. Missing payments is one of the easiest ways for your credit score to take a dip, and will quickly show creditors you may not be the most reliable person. While a few days late here and there may not have a major impact in some cases, but if it becomes a common occurrence it certainly will.

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Paying bills on time and in full shows you are prepared, on top of things, and always have enough to cover your bills. It shows you are a responsible borrower, and will always pay your debts according to the agreed-upon schedule. If you struggle to remember to make payments on time, consider making them automatically or leaving notes for yourself.

Keep Your Credit Utilization Low

Another important factor of your credit score is your utilization. This is how much of your available credit you are using in a given month. In general, you should aim to keep your credit utilization rate below 30%. So if your limit is $10,000 a month, make an effort to spend no more than $3,000 per month.

This shows that you can handle having a lot of credit without going crazy with spending. There are a few ways you can try to keep this utilization low. First and foremost, you can simply spend less on your credit card. Another option is to get an increase to your limit, in order to keep your utilization rate lower.

Further, checking your credit report regularly can help you understand the impact of positive (or negative) changes on your credit score while giving you insight into how lenders evaluate your profile.

Trying to buy a home with a low credit score can be both difficult and expensive. But by using these tips, you should be able to get your credit back to a good place sooner rather than later.

 


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