5 important changes to make to your credit before purchasing a house.
You can get the best property tax rate, low mortgage interest rates and on the other hand put down a down payment huge enough to make your payments more than reasonable when you take enough time to plan out your strategy for purchasing a home. This is the main reason why many families wait until the right time to make an offer on their dream home. The other reason why you should wait a little longer before buying a home is your credit score. How to increase credit history by decreasing dues is one of the searches done by real estate shoppers earlier to pinpointing a great home just because they have the knowledge of how much can be saved. There are 5 vital changes you can make to your credit to make home ownership more worthwhile and enjoyable.
1. Evade Signing up for new credit lines.
As soon as your credit score goes up, you are likely to get new and attractive offers for credit cards being sent to your home. Avoid getting credit cards with better credit lines before you expect to buy a home. To reduce the balances, you should ask your credit card issuers for a reduction or other benefits or an interest rate.
Pay all your debts.
If you have multiple debts, start by paying those with bigger dollar values. You will end up with more money saved and your credit will go up.
3. Refinance your students and car loans.
Refinancing all your loans will make the total amount due on you loan a lower rate. To satisfy all your unsettled loans, your credit report will be updated speedily.
Remove Past Due Collections
If you have any type of judgment, outstanding collection or past due accounts can stop you from getting your mortgage application approved. Despite the value of the account being minimal, mortgage providers shy away to provide people who have defaulted from past agreements with more money. This is the reason why you should ensure that all past due accounts are well taken care of including any that has already gone into collection before you apply for a loan. Having a history of late loan payment can impact your credit score negatively and make it difficult to get a home loan, but if you take care of the collection accounts early you will be able to own the home of your dreams.
5. Ensure All Errors are Corrected.
Although you may think that if you had a wrong past statement on your file won’t hurt you, remember that mortgage lenders always look at all pieces of information so that they can build their clients profiles. You don’t know who you will be accidentally linked to if you provide wrong information, therefore, ensure that you provide past employers and addresses. There may be someone with a similar name to yours but who has a worse credit score, and you don’t want to be mistaken for such people.
You can improve your credit score rating by following several ways and still be able to get a mortgage pre-approval. By making all the changes that are stated above, you just need to wait for a few months and you’ll observe a change in your credit score rating.