Buying a home is a financial dream held by nearly everyone. As is the desire to stop paying dead-end rent and being at the mercy of your landlord; a yearning that most of us can relate to. But we all know the build-up to buying a house starts long before the moment you finally receive the keys to your own front door. It isn’t until most people start to consider turning that dream into a reality that they hit upon their first obstacle; their credit scores.
Typically a score of 700 and above is the minimum you need to secure mortgage success. A good credit score is the difference between an open door to great mortgage rates and a closed one if you are the victim of a bad credit report.
The good news is that whether you need to give your score a complete makeover, or you just need to put the final polish on an already perfect score in anticipation of that mortgage application; these eight steps will put you on the path to getting the best mortgage rate for you.
1. Review your credit report
Once you’ve obtained your credit report, make the most of our credit repair services to help you scan and evaluate your report for any errors and inaccuracies.
2. Spring clean those inaccuracies
Sperity’s credit repair process leverages your consumer rights to remedy and remove these errors from your report. All achieved by contacting credit reporting agencies and collection agencies on your behalf.
3. Be up-to-date with payments
See our article for the #1 way to improve your credit score for more details. Without a doubt though, your best credit repair option is to make payments on time and without fail.
4. Go above and beyond
Another credit building tip is to make payments above the minimum rate to any of your creditors. Paying extra is a great indicator which works in your favor for anyone reviewing your credit report.
5. Don’t close any accounts
Even if you no longer use these lines of credit, they will still do great work for you in the background. Use them once every couple of months, pay the balance in full, then sit back and watch them boost your credit score.
6. Have three types of credit accounts open
Fewer than three lines of credit will impact a mortgage lender’s decision when they review your application. Get a new credit card at least six months before you apply for a mortgage and make small purchases that you pay off immediately to overcome this hurdle.
7. Restrain yourself
Don’t apply for more credit once you start your mortgage application. Going above 30% in your debt utilization ratio once you’re in escrow before the end of your application will disqualify you automatically.
8. Leave your money alone
Don’t be tempted to move your money around between accounts or credit cards. The former will increase your paperwork in the mortgage application tracing any large moves, and the latter will only incur fees, just work harder to pay the cards off instead.
Contact Sperity for more information on our best credit repair services.