Improve Your Credit Score

Posted by jamella in Lifestyle/Tips and Advice on February 20, 2021

Your credit score has a direct impact on your ability to buy a home. It is based on a number of factors, and you can work on improving your credit score this winter. You will need a credit of at least 620 for a conventional mortgage, and you will get a much better mortgage rate when your score reaches 740. Your credit score, or FICO, is a reflection on your ability to pay back your mortgage, and how well you have managed your debt in the past. Most lenders use the FICO 8 scoring model to determine your credit score.

The homebuying market is competitive in SoCal, which means you have to be ready with an offer when you find a house you love as a first-time homebuyer. With a good credit score, you will have the ability to purchase a larger home because of your low mortgage rate. When your credit score is below 620, you may be able to secure a mortgage through the FHA program or Veteran’s Administration. A mortgage secured with a lower credit score will require a higher percentage rate and cost you more money in the long run.

Winter is an excellent time to work on improving your credit scores. The homebuying season is currently going strong due to COVID, despite winter usually being a slow season. When you are focused on your credit score, you will optimize your ability to purchase a home. You will still need to have enough income to get a mortgage, but your credit score is going to be the driving force in your ability to buy the home of your dreams.

If you are looking for ways to improve your credit score, there are a number of things you can do over the next few months. As you prepare to get your finances in order to purchase a new home, consider the following ways you can boost your credit score:

  • Get a complete credit report to see what your current credit score Identify any collections debt that you can settle, and pay off the debt whenever possible.
  • Pay your credit cards bills at least two times a When you pay more than the minimum payment every month, your balance is going
  • to go down faster. Part of your credit score is based on payments you make on time, and every extra payment matters.
  • Pay high interest credit cards off To get control of your credit card balances, put the most money you can every month on your high interest credit cards.
  • Open a new credit card to increase the amount of credit you have
  • Make sure your credit is It benefits your credit score to have more than one type of credit, such as a credit card and a car loan.
  • Ask current credit cards for an increase in your limit to boost your overall available
  • Use secured credit cards when your credit score is low as a way to increase available
  • Dispute any collections on your credit report that you do not believe are You may be able to get certain collections discharged from your credit report this way.

Once your credit score is optimized, it’s time to find a real estate agent in SoCal you can trust. At Houzerz, we help you every step of the way in the home buying process. Housing doesn’t have to be hard to secure when you are tired of paying rent to landlords. When you are ready to find your first home, it’s time to give us a call so we can give you the care and attention you deserve during the home buying process.