How To Repair Credit

9 Ways to Repair Your Credit

Buying the house of your dreams does not start the moment you step foot into that first open house. Oh no, it begins long before that. One of the first steps and most important factors in home ownership is understanding your finances, which includes your credit score.

Your credit plays a critical role in determining the type of home and in some cases even if you will be able to get a loan for a home. If you want to buy the home of your dreams you will need to be sure that your credit supports the size loan you need to make your dreams come true. Do not be discouraged if you have less than perfect credit, as most do. There are plenty of ways that you can effectively improve your credit score so that you can buy the home of your dreams! Here’s how you can repair credit on your own. 

How to Repair Credit—Step by Step

Know what you are dealing with. Improving your credit score starts with knowing exactly where your credit stands. In order to fix problems with your credit you must first know what problems exist. Step one is to get a copy of your credit report.

Look for errors and fix them. Each year, on average 25 percent of buyers who are denied a loan have errors on their credit report. The good news is that even if there is an error on your report you can get it fixed. Closely examine your report and contact anyone of the credit bureaus to file a claim to have the mistake fixed ASAP.

Pay your bills. Easy enough, right? You’d be surprised at the impact missing even one payment can have on your credit score. So, pay your bills and pay them on time – every time!

Pay more. A secret to improving your credit is to never pay only the minimum amount due on bills. Always pay more, even if it’s only an extra $20 a month.

Keep your balances low. Never allow your balances to go over 50 percent of available credit. Doing so has a severely negative impact on your credit score.

Pay it off. Do not move revolving debt to another card to avoid fees and rising interest rates. Instead, pay it off, little by little

Keep it open. Once you pay off a card DO NOT close the account. This trick will help you to improve your percent of used credit to available credit.

Watch your spending. Prior to getting a loan for a home it is best to not indulge in any large purchases. So, postpone that vacation and put off buying that new car until after you buy the home of your dreams.

Plan ahead. It takes time and a lot of it to repair credit. So, it is important to plan ahead and start making efforts to improve it long before trying to qualify for a loan.

New rules have increased the scrutiny of today’s mortgage applications, making it harder than ever to qualify for a loan. Now is the time to address your creditworthiness if you wish to buy the home of your dreams. Make your dreams come true by using these tips to repair credit, and then call me to help you find your dream home!