Email Post to a Friend: Buying a House: How Do I Raise My Credit Score?

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Credit Score Improvements - Margaret Rudd

If you're looking at buying a new home in the Southport area, you're likely going through one of the most common home-buying processes: mortgage application and pre-qualification. No matter who your lender is, they'll use your credit score as a reliable scorecard to gauge your creditworthiness and extend a line of credit to you.  

Our REALTORS® are aware of the challenges new homebuyers face. You're probably asking yourself, "How do I raise my credit score?" Read on to find out!

  • Eliminate Petty Debts
    Your credit score is made up of several different criteria. These factors include how large debts are, how long you've had them, and how well you've paid them off, among other things. One of the most significant criteria and one you have the most control over is how sizable your debts are and how long you keep them.  

    You may be thinking that those little debts (small medical bills, old store credit cards, or paltry sums in collections) are nothing to be concerned about. In the big scheme of things, maybe they aren't, but you can raise your credit score several points by paying off those debts. 

    Several small debts can add up in the eyes of credit reporting agencies, so do yourself and your credit score a favor and settle up those smaller sums.

  • Pay Your Bills on Time
    If you're continually paying bills or loan obligations after their due date, then you're likely damaging your credit score. Credit reporting agencies see late payments as a failure to take care of the credit you have and as a result, will ding your overall credit score.

    If you have trouble paying your bills on time, and it's merely a matter of forgetfulness, then consider enrolling in automatic bill pay. You can do this either through your bill provider, such as your energy company or through your bank. In either case, eliminating the need and worry about paying your bills will make sure they're paid both on time and in full every month.  

    On top of all of that, you may receive discounts for early payment or for making direct ACH transfers to your bill providers!

  • Pay Down Your Debts
    It stands to reason from the tips above that the best way to boost your credit score is to pay down the existing debts you have. Larger debts such as student loans or another mortgage (as long as they have been paid on time) won't hurt you. But it does look much better on your credit score that you've been making a concerted effort at knocking them down.

    From your lender's standpoint, lowering your income-to-debt ratio will show you're in a better position to borrow and repay what you've taken out in loans. Your goal is to make yourself an attractive potential borrower by proving, through your credit score and financial documents, that you're capable of taking care of business.

Speaking of taking care of business, if you're in the market for Southport homes for sale, then contact us to see our current inventory!