If you are looking for a way to qualify for a home loan, you probably know that your credit score is important. Unfortunately, there are a lot of people who have low credit scores, and some people have low credit scores through no fault of their own. If you want to maximize your chances of not only being approved for a home loan but also being approved for better terms, you need to find ways to Boosting Your Credit Score Quickly. What are some of the most important points to keep in mind?
Take a look at a few important points below, and do not hesitate to reach out to an expert who can help you.
Tips for Boosting Your Credit Score Quickly
1. Build Your Credit History
If you feel like your credit score is low because of nothing you have done wrong, then there is a chance that your credit score is low simply because you haven’t built a long enough credit history. The reality is that if you do not have a history of paying your bills on time, then it will be like you do not have a credit score at all.
Therefore, one of the fastest ways to increase your credit score is to open credit cards. Of course, you need to make sure that you pay your credit cards on time if you want your credit score to remain high, but you need to have a credit history to start building a score. Consider opening credit cards that have a relatively low credit limit and do not have an annual fee. That way, you can save money while building your credit score.
2. Ask for a Copy of Your Credit Report
You should also ask for a copy of your credit report at least once per year. Everyone is entitled to receive one free credit report from the three major credit bureaus. They include Experian, Transunion, and Equifax. When you apply for a home loan, the lender is going to request a copy of your credit report from these credit bureaus.
You need to know what the lender is going to see. There is a chance that there could be mistakes on your credit report that you are not even aware of. Your credit score should not be artificially low because of someone else’s financial mistakes. If there is someone else out there with the same name as you, their financial issues might end up on your credit report.
You have a right to ask for these mistakes to be removed. If you find mistakes on your credit report, reach out to the credit bureaus and tell them to fix it. It may take some time for them to respond, but it will be worth it because your credit score should go up quickly.
3. Pay Your Bills on Time
Without a doubt, you need to make sure that you pay your bills on time. If you start to miss payments, those missed payments will be reported to the credit bureau. Then, your credit score will take a hit. In general, if you make a payment that is late by more than 29 days, it will be reported to the credit bureaus. Then, your credit score will fall.
There are a few ways you can make sure that you pay your bills on time. One of the easiest ways to do so is to set up an automatic payment. Of course, you need to make sure that you have enough money in your account to pay your bills, so you might want to consider moving money into a different account that is responsible for paying all of your bills. That way, you don’t see the money in the account, and you won’t spend it because you know that it is meant for your bills.
The biggest risk of setting up automatic payments is that you might not review your statement before it is paid. You should always make sure you review your bills when they come in. That way, if there is a mistake on them, you can fix them before they get paid.
4. Pay Down Existing Debt
Furthermore, you should pay down some of the existing debt you have. Even though it is fine to pay your bills on time, you need to make sure you don’t carry balances that are too large. Therefore, you should consider paying down some of your existing bills. If you can reduce your credit utilization rate, you may be able to Boosting Your Credit Score Quickly. As a good rule of thumb, you should try to keep your credit utilization rate in the single digits. That way, your credit score will improve. You will also have more room to take out a home loan if you decide to do so in the future.
5. Don’t Apply for New Accounts Too Often
You need to have a long credit history, but you do not want to open up too many accounts. Every time you apply for a new source of credit, there will be a hard inquiry into your credit score. As a result, your credit score will take a small hit. Keep in mind that this hit is only temporary, but if you keep getting turned down for credit cards, you might keep applying for new accounts. As a result, your credit score might start to slip a bit. You need to be cautious about how many credit card applications you submit. If you apply for new ones regularly, your credit score will begin to fall.
6. Talk To Your Lenders
Finally, if you are really looking for ways to increase your credit score quickly, you should consider reaching out to a local lender. If you reach out to an expert who can help you find a home, they can do a deep dive into your credit report. You may want to start by asking them to conduct a soft credit inquiry instead of a hard one. A soft credit pull is not going to have an impact on your credit score.
Then, they can take a look at your credit report and let you know what you should do if you want to increase your credit score. That way, you can find ways to boost your credit score before you ask them to do a hard credit pull down the line. The sooner you get to work building your credit score, the faster you can get it into a position that allows you to apply for a better home loan.