How to Improve your Credit to Buy a Home

Real Estate Agent with Sellstate Next Generation Realty

If you are planning on buying a new home, you’d be aware of the importance of having an appealing credit score for the mortgage lender to have your home loan approved. While some people have no problem passing through this phase due to their good credit scores, others with unimpressive scores may face a lot of problems. Here are some tips to follow before you buy a home.

If you are one of those people, you will need to work on your credit to get a better interest rate and lower down payment if you are a first time home buyer, this would be a ideal place to be. Although there are many things you can do to improve your credit score, still you can’t expect your score to jump higher overnight. Here are a few ways to make your overall score look better.

How to improve your credit

       Start Taking Action Now

Before devising any plans to clean up your past, you should first start taking action in the present. Keep your emphasis on your existing performance. Start paying off your current loans timely and try to pay in bigger installments than you usually do every month.

      Minimize Your Credit Percentage

The credit score report is made on the basis of your debt percentage to the total available credit limit. Therefore, figure out where you actually stand. Your vision should obviously be to chuck out all of your debt amounts. But, for now, just focus on gradually minimizing the credit percentage. First off try to push it below 50% and then continue with the downward spiral of the debt ratio.

         Don't Close your Credit Cards

While trying to minimize your credit ratio, you may end up affecting your score negatively if you aren’t cautious enough. This could happen if you decide to close any credit card after clearing your payments. Do not make the mistake of closing your card because it will bring down your total credit limit and will eventually shoot up your credit ratio. 

         Get Your Unpaid Debts Current

It goes without saying that you should clear up your late and outstanding payments as soon as you can. To be late in your payment is not a big deal but to keep dragging it that way is definitely going to put your credibility at stake. So, start paying off your late accounts now and provide some solid justification to the lender for what caused you to lag behind. This will significantly boost your credit score.

         Review your Credit Report for Any Errors

Deeply analyze your credit report because they sometimes contain some serious errors that can make your credit score seem poor. Carefully review all the accounts and check if there are any evident blunders. Also, keep an eye on any unidentifiable accounts. And if you find any errors, get them corrected immediately.

         Don’t Open Several Accounts Simultaneously

Although it may sound like a good idea, and it is up to the extent of just one extra account, but numerous new accounts is a total no. Opening up several accounts may end up hurting your credit score instead of improving it because it would make the lender unsure about your behavior. And so he will be reluctant to proceed with someone with such a risky attitude.

However, as we just said, you can have one additional account for a new credit card, but make sure to keep it to just one.

More Resources on how to improve your credit before buying a home


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Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

Very helpful information Fred!

Aug 02, 2017 01:35 PM #1
Local Realty Service
Sellstate Next Generation Realty - Ocala, FL
Central Florida Real Estate Agent

Thanks Bill, I hope you are having a great day??

Aug 02, 2017 01:38 PM #2
Inlanta Mortgage - Madison
Inlanta Mortgage - Madison - Madison, WI
Serving Wisconsin, Illinois, Minnesota & Florida!

Solid information on improving your credit Local Realty Service

Aug 02, 2017 02:26 PM #3
Keith Lawrence
Keller Williams First Choice - Prairieville, LA
Prairieville Louisiana Real Estate Consultant

Great article. Thanks for sharing!

Aug 08, 2017 04:10 PM #4
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