In today’s climate, mortgage lenders have become very conservative about how they lend their money. As a result, there are many buyers who do not qualify for a mortgage. Getting declined for a mortgage can be discouraging but that doesn’t mean you have to give up on your quest for a home. If your credit is not up to par you may only need to take a few steps to improve it to enough to purchase a home. A good mortgage lender or credit counselor can tell you what steps you need to take to get on track. No matter how bad your credit report may appear you can always take steps to make it better. For some buyers this may take a few months and in other cases a few years, but at the end of the day, if you are disciplined and follow the steps outlined by your mortgage pro or credit counselor you will be ready to purchase your first home and take a significant step towards building wealth! Here are some quick tips from MyFico.com that can help you improve your credit score:
- Pay your bills on time.
- If you have missed payments, get current and stay current.
- Be aware that paying off a collection account will not remove it from your credit report. - It will stay on your report for seven years.
- If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor.
This won’t rebuild your credit score immediately, but if you can begin to manage your credit and pay on time, your score should increase over time. And seeking assistance from a credit counseling service will not hurt your FICO score.
- Keep balances low on credit cards and other “revolving credit”.
- Pay off debt rather than moving it around.
- Don’t close unused credit cards as a short-term strategy to raise your score.
- Don’t open a number of new credit cards that you don’t need, just to increase your available credit.
This approach could backfire and actually lower your credit score.
- If you have been managing credit for a short time, don’t open a lot of new accounts too rapidly.
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