Your credit score is a huge contributor to the interest rate you get on your mortgage. Here are 5 tricks to BOOSTING your credit score!
Check for Errors
A recent study by theFederal Trade Commissionfound one in five consumers had at least one error on a credit report. Some of those errors were big enough to damage the consumer’s credit score. The good news: The credit bureaus have to investigate and remove or correct any errors you find.
Order a copy of your credit reports from all three credit bureaus—Equifax, TransUnion and Experian. By law, you are entitled to a free copy every year throughAnnualCreditReport.com. Once you have the credit reports in hand, comb through them and dispute any errors you find with the bureau responsible. The credit bureau has 30 days to investigate and remove errors.
Pay Down Credit Card Debt
While any debt has an impact on your credit scores, credit card debt is weighted more heavily than revolving debts such as student loans or auto loans. Paying down your credit card debt can boost your credit scores. Most experts say you should aim to keep your credit card debt at no more than 10% to 30% of your available credit limit.
Ask for Forgiveness
Under the FICO model, bill payment history accounts for 35% of your credit score. Even one late payment is enough to drag down your scores, but you may be able get the black mark removed simply by asking your creditor. Known as a “goodwill deletion,” the creditor may be willing to remove the late payment information if you have an otherwise spotless history with the company. However, creditors aren’t usually willing to do this if you have a history of late payments.
Keep Your Old Accounts Open
If you are working on improving your credit scores before youapply for a mortgage, you may be tempted to cut up your old, unused credit cards and close the accounts. Don’t! That will backfire. The length of your credit history accounts for 15% of your credit score. By closing your oldest accounts, you are shortening your overall account length, which will only hurt your credit score. Instead, once you pay off a credit card, tuck it away in a drawer and keep the account open to keep building on your credit history’s length.
Pay On Time, Every Time
Once you have taken steps to lessen the damage of your past, do not let history repeat itself. Aim to pay all of your bills on time each month. Every timely payment you make will add to the positive history on your credit report. Over time, you will see your scores improve across the board.
Special thanks to Realtor.com and Laura Sherman for writing this article.
Author:Evan Ballew Phone: 936-581-9959 Dated: August 20th 2015 Views: 941 About Evan: Who is my Realtor?
Evan Ballew is licensed Real Estate Agent. Being born and raised in Montgomery...