If you've been thinking about buying one of the beautiful Mansfield homes for sale, you'll want to get your finances in order as soon as possible. In addition to saving for your down payment and gathering up your financial documents, you'll also need to check your credit score.
Your credit score will impact the interest rate you'll pay on your home loan, and, in some cases, whether you'll get approved at all. If you're concerned that your score is lower than it should be, don't panic. The following six tips will help you increase your score so you don't miss out on the home of your dreams.
- Review Your Credit Report & Dispute Inaccuracies
The first step in improving your credit is to ensure all the information reported is correct. Start by requesting free copies of all three of your credit reports from the government website AnnualCreditReport.com. Review your report carefully. Make sure there are no accounts listed that aren't yours and check for incorrect information like late payments or defaults. If you find an error, report it to the credit reporting agency right away. It can take several months for the company to review the case and make a correction, so the sooner you can do this, the better off you are.
- Set Up Automatic Bill Payments
Late or missed payments will really drag down your credit score, so now is the time to make sure it never happens again. Almost all creditors offer payment feature that will automatically make your minimum payment before the due date.
Set this up and make sure you keep enough money in your bank account to cover the payments. This way, you'll never have to worry about missing a payment again. Best of all, as you start making more payments on time your credit score will rise.
- Pay Down Unsecured Debts
Large outstanding balances can pull down your credit score, especially if they're high in relation to your total available credit and/or income. Start paying down your credit card and other unsecured loan balances as soon as possible. If you don't have enough disposable income, consider selling items, working more hours, or picking up some part-time work.
- Minimize Credit Inquiries
Each time a lender runs a "hard inquiry" on your credit, it can lower your credit score. Although the impact is usually small and temporary, when you're looking to buy a home, it's best not to take any chances. If possible, avoid taking out new credit cards and applying for loans.
- Use Score-Boosting Programs
New score-boosting programs are now available to help those with limited credit scores. They work by adding other accounts, like phone and utilities, to your credit reports so these on-time payments are reflected in your score. If your credit report is thin and your score is low, this could be a good option for you.
- Be Patient
Even if you follow all of the advice above, it will take some time before you start to see changes in your credit score. Start practicing good credit habits now and stick with them for the rest of your life. Your efforts will be well worth it both now and for years to come.
Buying your first home is exciting and can also be overwhelming. You don't have to do it on your own! When you're ready to start looking for your dream home, we can help. Contact Haring Realty today to discuss your goals and get started.