If you think your credit score is keeping you from buying a home, or if you are a first time homebuyer just starting to build your credit, here are seven simple steps you can take to improve your credit rating.
- Get your credit report. Start by reviewing your credit report to know where you stand. You can get a free credit report from each of the major credit reporting agencies once a year at annualcreditreport.com.
- Check for inaccuracies. Review your report and contact the credit bureaus immediately to correct any errors as incorrect information can impact your score. Remember that a good credit rating can help you qualify for a lower loan rate and thus lower payments.
- Know your credit score. Understand what those numbers really mean. The average credit scores generally run from 300 to 850. As of October 2012, the average FICO score is 689, according to MYFICO.com.
- Pay your bills on time. It is important to make all payments on time. Late payments and collections can have a major negative impact on your score.
- Keep a balanced profile. Do not overspend and underpay your bills. A sudden splurge of spending combined with past due bills and cash advances has a way of making credit agencies worry that you are in financial distress.
- Keep your balances low. High balances on your credit cards and other “revolving credit€? will lower your credit score. So, keep your balances low. Even better, pay those bills off each month. If you're unable, try to make double or multiple payments throughout the month as a way of paying those debts down faster.
- Slow down on opening new accounts. Too many credit accounts can make you seem like a bad credit risk.
Need more information or assistance in improving your credit score? McCaffrey Home Mortgage offers personalized service to help you get credit ready for a home loan. Contact us at McCaffrey Home Mortgage or call (559) 256-7050 to learn more.
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