As future Halifax homeowners, you are in the home stretch. You've learned about your Beacon score, what it is composed of and some programs to help raise that score. Now, you will learn some tips for improving your credit yourself by creating good credit habits. For anyone unfortunate enough to have not yet read my first three posts on this subject, Part 1, Part 2, and Part 3 are easily available to you!
The biggest tactic for improving your credit score is consolidating your debt. One option is to get a short-term second mortgage to pay off all your debt. Your outstanding credit will show zero and after a few months of the bureau's reporting it zero, your Beacon score will increase to allow you to get more competitive rates.
Do not over apply to creditors and lenders. As you learned in Part 2, 10% of your Beacon score is made up of inquires to new credit cards. It's easy to not realize the ramifications of something as simple as saving 10% of your current bill at a store by just applying for credit. But you are giving them authorization to pull your credit report and in return, lowering your Beacon score.
Before applying to many lenders, talk to a mortgage professional about which product is best and only apply to that one. It will save you multiple hits to your credit report when you will only be choosing one in the end.
Pay your monthly payments no matter how small the balance. Although it may seem like a waste of time paying a small balance in full, if you delay, thinking you will pay double next month, it still counts as a missed payment and that will lower your score. You may want to look into setting up automatic payments through your bank each month. This can be helpful as long as you don't forget to balance your checkbook after the automated payments take effect!
As you can see, with some guidance from a broker and some education and smart decisions on your part, your bruised credit can be repaired over time. By following some easy steps and practicing good credit habits, a great mortgage rate will be within your reach. When you are ready, call Roy Thomas to help you make your homeownership dreams a reality.
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