Steps to Improve Your Score
In some cases, your credit score is not what it needs to be in order to get a loan or you are simply interested in improving your score. improving your score will not only help you get approved for the loan you desire it can save you tens of thousands of dollars in interest over the life of the loan. Here are great steps to take:
First, notify your mortgage loan officer that would like some credit advice. Our team of mortgage loan officers are experts who look at credit reports every day. They know the scoring systems, the weight of different factors, and possible actions to improve your score. A mortgage loan officer is someone who can be your guide through the complex mortgage process. You should be able to get some quality feedback about your report from your mortgage loan officer on any problem areas. Don’t be embarrassed to ask for advice on what you can fix and how to go about it.
If any of the problems pointed out by your lender are credit report errors, fix them. These are some of the easiest problems to fix on your report. It’s estimated there are millions of errors on credit reports, so pay attention to outstanding debts you thought you paid off, numbers that don’t match your records, or what looks to be fraudulent activity. To fix an error, contact both the credit reporting agency in question and the place that gave them the faulty information. Each of the three credit reporting agencies — Experian, TransUnion, and Equifax — has an online submission form for disputes. The agencies are required to review and respond to your claim within 30 days.
If you do have legitimate problems with your credit, some can be fixed easier than others. Start with the easy stuff.
Pay Your Bills – if you’re late or behind on any payments, catch up. Switching to automatic bill payments and paying off accounts in collections are excellent steps.
Reduce Your Balances – using too much of your available credit will count against you, so pay down credit cards with higher balances. Whatever you do, don’t close any accounts. That reduces your overall available credit, which raises your debt-to-credit ratio, the opposite of what we’re trying to do.
Don’t Apply for New Credit – don’t apply for new cards, car loans, or personal loans while you’re trying to buy a house. Each inquiry — even if you don’t use all the credit on a new card — counts against you.
Some credit score problems just take time to fix. The sooner you get started working on them, the sooner they’ll improve.
Fixing errors and delinquencies will help your report in the short term, but lenders really want to see smart credit management over the long haul. Make an effort to keep up with bills and continue to pay down balances. The longer you do so, the better your score will be.