In this article, Hometown Lenders – with locations in Lexington, Kentucky (KY), the surrounding cities, and across Tennessee – is here to help you learn how to improve your credit score before you get a mortgage. Contact us today at 859-475-1323 to learn more about our mortgage process.
If you want to get a mortgage, a good credit score is essential. For
those who worry about their score, there are several ways you can raise your
number and ensure your application is approved.
Paying your bills on time is monumental for your credit
score. The biggest influence to achieve a good credit score is to make payments
month after month before they are late. Every time a bill is paid after their
due date, it hurts your credit and damages your credit score. This tip also
extends to items that are not typically related to credit reporting, such as
renting a library book. While the library does not report to credit bureaus,
they may end up calling a collection agency if a bill is left unpaid. The agency
could then place the item on your credit report and damage it in the process. So,
it is best to treat every bill as though it has merit on your credit and pay it
in full each month.
While it may seem counterintuitive, it is a good idea to leave old debt
on your credit report. This means that when you pay off a car or home, do not
attempt to have the old accounts removed. Negative items are bad for your
credit score but debt that you have managed to handle improves your number. Try
to leave good accounts and old debt on your record for as long as possible. Proof
that you have a history of resolving debt is a big help for your score. You may
want to move forward from your past, but it actually does more good than harm.
The proper usage of a credit card is the definitive way to establish a
history of positive payments and lead you on the path of building a better
credit score. However each application for new credit will have a negative impact
on your credit score, which will only make it difficult to attain a mortgage.
So instead of trying to get multiple credit cards, a safe alternative is to
apply
for a secured credit card. This method is a simple way to build
credit when it is used in a responsible manner. A secured credit card does
require a deposit, but you can get this back eventually. After you show the
company you are capable of making payments in full and on time, they will
return your deposit to you.
When you have a credit card, secured or not, a good rule of thumb is to use
only a low percentage of the allowable credit amount. The smaller the
percentage you use, the more it helps your credit. It is recommended to stick
to using 30% or less. So if you are using credit, try to
keep
the balances low.
Hometown Lenders has been responsible for assisting thousands of
clients with their mortgages. Our office is available to help simplify the
process of buying a home and refinancing, so that clients find it as pleasant
as possible. We have locations in Lexington, KY, surrounding cities, and across
Tennessee to provide our mortgage services to the surrounding area. Call us
today at 859-475-1323 to let us help you with your mortgage.
