How To Prepare Your Credit For A Mortgage

Posted on: 13 March 2019


If you are hoping to purchase a house in the near future but know that your credit is less than perfect, you really should take some time to prepare your credit first. Preparing your credit is not something that will happen overnight, though, and this is important to know. Instead, you may need to work on this for several months, or longer, and here are the top ways to do this.

Get a Copy of Your Report

Viewing your own personal credit report is the only way to know where you stand, in terms of credit score and condition, and you can get a copy of your report for free once each year. There are also a variety of different cellphone apps and websites that offer free credit reporting services. You can use any of these methods to find out what is on your credit report, and this should help you know where you stand.

Dispute Problems You Find

When you view your credit report and find things on it that are not correct, you can go through the process of disputing the items to have them removed or modified. If you can successfully win your disputes, it could instantly cause your credit score to increase. An example of something you might dispute is a bill listed on your report as unpaid, even though you have proof you paid it. Disputing this so that the entry says that it is paid could cause your score to rise.

Pay Off Balances

A third way to work on your credit is by paying off balances you owe on credit cards. Part of your credit score is made up by comparing the amount of credit you are using to the credit lines you have. Your score will drop as you utilize a higher percentage of your credit, which means that your score will decrease if you pay off debts to lower this utilization rate.

Open a Couple New Credit Cards

If you cannot get all your credit card debt paid off, you could consider applying for a couple new credit cards. If you can get approved for this, your overall available credit will increase, and this will automatically cause your credit utilization rate to fall. The result will be an increase in your score.

If you have questions involving improvement of your credit score, talk to a mortgage lender. Mortgage lenders can offer tips and strategies to help people improve their scores so they can qualify for better mortgage loans. For more information, reach out to home mortgage services in your area.