If you want to purchase a house, it's crucial to build your credit history along with your score. When hunting for your first house, a higher credit score will make it easier for you to get approved at low mortgage rates. You may make the most of this period by working to raise your credit score, whether you're actively looking or just considering starting your house hunt. If you want to achieve your goal of owning a home but your credit score is on the lower end of the spectrum, here are some tips to raise your credit score:
Keep a check on your credit score:
Before embarking on the mission of your improving your credit score, it is important to know what is your score. Every week check at least twice to know how, when and with which payments your score is improving or declining. This way you can also filter out any errors which have been made and dispute over it. It's wise to keep a clean credit report which is easily understandable to you before you submit it to someone.
Clear the dues:
All the past dues that you have on your cards, try to clear them with a systematic payment plan first. Do not just clear it all at once and try to pay some amount of it after a few days or weeks. Also, pay all your bills on time along with reducing your credit debt. Keep 1 good credit card as it is easy for the mortgage lender to see your history and don’t take any new debts.
Use 30% to 50% of your card:
If you are in a hurry, we recommend to use 50% of your card every month and pay it on time. On a regular basis maximum usage of 30% is suggested on the condition that it is paid in full every month. For example, for a $1000 limit you should be spending $300 each month.
Increase your credit limit:
See all your month to month expenditures and calculate that the spending is below or at 30%. If it is regularly exceeding the said limit then consider applying for an increase in your credit limit to maintain the given criteria.
Pay more than minimum balance:
Paying the minimum is a necessity, however, Team Panag recommends that you always pay either in full or at least more than the required minimum due each month. Paying the minimum always when you have a large amount due can do more harm than good in the longer run.
To buy a house a credit score of 600 is needed. 680 is considered to be good credit score which will lead to better rates and faster approvals.
Book a consultation call with us now so we can guide you in your housing buying process.
