Having a bad credit score can be a serious challenge to getting a mortgage in Barrie & surrounding area. Here are 7 simple ways to improve your credit score when buying a home:
1. Remove Disputed Accounts
A disputed account is one which contains credit report errors. These accounts need to be closed before applying for a loan. Contact the credit bureau and ask them to have the accounts removed as quickly as possible.
2. Improve your Payment History
Pay all your bills on time, and if you encounter a problem paying one of the bills, contact your creditors immediately. Explain the problem to them and try to arrange a payment method which allow you to keep a portion of the late notations off the credit report.
3. Keep Debt to a Minimum
Your credit card balance should be low. Don’t just try to pay off debt by moving it to other cards. Also don’t close all of your unused accounts, since their zero balance can actually help your score. But avoid opening new accounts unnecessarily, since this can alter your debt-to-credit-limit ratios.
4. Manage the Timing of your Credit History
This aspect of credit score improvement involves letting a length of time pass to better your score. In that time period, don’t open several new accounts. This sends the signal that you are not knowledgeable enough to handle your credit responsibly.
5. Effectively Manage New Credit
Some points to keep in mind for this section are:
a. Making several credit inquiries in a shot period will lower your score.
b. If you’re shopping for a home loan and have to make several inquiries, keep them pulled as close to each other as possible.
c. You need to make payments on time and not max-out your credit limits.
6. Pay Off Fines
One of the worst offences in the eyes of credit companies are people who do not pay off their pending fines and late fees. Avoid letting such instances lower your credit score by paying off fines as soon as you receive them.
And now for the last of the 7 simple ways to improve your credit score when buying a home…
7. Avoid Risky Transactions
These are the transactions that can be a cause for concern for your card issuer, such as taking cash advances or using credit cards at risky places.
Having a good credit score is key to getting a mortgage with a good rate. You can always go to private lenders when you have poor credit but keep in mind you will be charged a higher interest rate.
