If you’re planning any sort of large financial transaction—such as refinancing or buying a home in the Denver area—be aware of your credit score. Higher credit scores can mean a better chance of getting approved for a loan as well as a lower interest rate.
Here are five things you can do to help bump up your credit scores and keep them working for you whether you live in Denver, Seattle, Boston or anywhere in-between.
1. Get and Check Your Credit Report Scores – Specifically, you want to look for any accounts or late payments that are not yours, for duplicate past-due items, for an incorrect Social Security number and/or date of birth, and for any entries more than seven years old. Items older than seven years are supposed to be removed from your report regardless of whether they are positive or negative entries, but you definitely want to nix the negative ones.
2. Argue for Error Fixes – Once you bring a mistake to the attention of the credit bureau, the law requires them to investigate and provide you with feedback. Usually, the credit bureau will ask any creditor reporting past due information to check its records. If the creditor doesn’t respond or can’t prove the information, that item is (or should be) deleted from your credit report.
3. Time is Money – Specifically, if you pay your bills on time you’ll be eligible to save money. Payment history makes up a large part (about one-third) of a credit report, so paying bills on time translates to a better score and better terms on loans. Set up automatic bank payments if that will help you be on time.
4. Lower Debt – If you have two or more credit cards and are close to the limit on all of them, lenders assume you’re not in good financial shape and will probably not qualify you for a loan. A good rule of thumb is to keep balances below 50% of available credit, and lower if possible.
5. Don’t Close Old Accounts – Older accounts are valued more than new accounts, and closing old or inactive credit accounts/credit lines reduces your total amount of available credit, which in turn can lower your credit score.
The site www.annualcreditreport.com is a government-authorized website that can provide you with a free copy of your three major credit reports. You can use this site to get a free credit report once every 12 months, and a good rule of thumb is to review them all once a year for mistakes or old entries.
Being vigilant and following the steps above will help keep your credit in great shape—and let you live in that beautiful Denver neighborhood of your dreams.
Let the professionals at the Bandy Team help you buy or sell a Denver home, contact us for a no-obligation consultation. If you’re thinking about buying a home in Denver, we can show you some terrific properties in Denver, including homes in Denver Highlands and real estate in Washington Park (also known as Wash Park). You may also be interested in horse property in Franktown or homes in Parker, including a wide variety of homes in Canterberry and real estate in Stonegate.