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How can I improve my credit score quickly before I apply for a mortgage?

QuestionsHow can I improve my credit score quickly before I apply for a mortgage?
Terrance R. asked 3 years ago

I am relocating to the east coast for a new job and am looking to purchase a new home for my family and I. I’ve looked into my credit and while it’s not bad at 760, it’s not as good as I know it can be. I am wondering how can I improve my credit score quickly before I apply for a mortgage?

1 Answers
Kristen T. answered 3 years ago

Moving to a new city is an exciting time, but trying to relocate your family and all of your belongings can be stressful. While your credit is good enough at 760 to get you a mortgage, you will not be offered the most competitive rates. If you want to increase your credit score before you invest, check out the following list of tips to improve credit score fast – the smart way.

  • Request a copy of your credit report from each of the three credit bureaus (Equifax, Experian and TransUnion), By going to annualcreditreport.com you can get a copy of each for free once a year. Once you obtain your credit reports look them over checking for any errors. If you do find an error, report it to the credit bureau immediately. If the information is deemed to be incorrect the credit bureau will correct it within 30-45 days.
  • If you have special financial circumstances that rendered you unable to pay your bills (i.e., being let go from your job) you can negotiate with the credit bureau. Draft a letter asking to remove any debt or collections account detailing the reason why and offer to pay the remaining amount to be labelled as “paid as agreed” or to be removed from your report completely. Make sure you get a written confirmation of the agreement before making any further payments.
  • Ask your lenders to increase your credit limits in order to decrease your overall credit utilization. This means that you use a smaller percentage of your available credit. Try to keep this below 30%.
    • Once you do get an increase in your credit limits, check your credit report to make sure your current account limits are up to date. For example, if your credit card limit was increased make sure the change was reported.
  • If you don’t already have one, apply for a credit card. This will help you vary the types of credit you have which looks good to lenders. If you have a credit card, a car loan, and a mortgage you will be seen as a responsible borrower across multiple platforms.
  • If you can’t get a credit card, try becoming an authorized user on a family member or friend’s credit card. This allows their good credit to appear on your credit report. Be sure not to overspend on their accounts as the responsibility will fall to them and it will hurt both of your credit scores.
  • If you are tempted to close a credit card account because it goes unused, think again. Closing the account will lower your available credit and therefore increase your credit utilization. Think about setting up automatic payments for your utilities and link them to an unused account. This way the account can stay open and your bills will get paid on time.
  • When it comes time to pay your bills, pay them in full and on time. If you want to keep your credit utilization low, one idea is to pay your bills twice a month.