If you are considering homeownership, the time to start cleaning up your credit is now. Below are some tips on how to increase credit score for mortgage acceptance; they are intended to boost your chances of obtaining the mortgage you desire at an attractive rate.
Check Your Credit
There is valuable information on your credit report for lenders; it keeps record of your past and present debts. It also provides information on how well you have been keeping up with your payments. When evaluating your application, lenders examine reports from Experian, Equifax and TransUnion, three major credit bureaus, and the median score is usually used.
Getting in the habit of checking your credit helps you with identifying errors, collections and past-due balances. Disputing errors on your credit report involves a lot of paperwork and time before the issue is resolved. You cannot proceed with a mortgage application before the disputes are resolved.
Always Pay Your Bills On Time
Potential lenders want to be confident you will honor your commitment. A pattern of late or missed payments can prevent you from securing a mortgage. Having your bills drafted automatically from your bank account is a smart method of avoiding late payments.
Pay Down Your Debts
Credit utilization is another aspect of your credit score and it is basically the percentage of available credit you are using currently. A number of individuals use a credit card to cover daily expenses and earn rewards; however, even if it is paid off in full each month, this increases your credit utilization. Therefore, a few months before you apply for a mortgage, it would be wise to use your debit card to cover regular expenses. If you have other month-to-month debt, give yourself additional breathing room by also chipping away at those balances.
Do Not Incur New Debt
In addition to taking steps towards having as low a debt capacity as possible, it is vital for you to understand that any recent application for new credit could negatively impact your credit score. This is because it could come across as if you are having issues with making ends meet and you are opening up a new line of credit to fill the gap. If you want to purchase another big-ticket item, waiting until after you secure the mortgage would be smart.
Everyone deserves the opportunity to own a home. However, your current financial situation could be thwarting your chances at qualifying for a conventional mortgage loan. Thankfully, LendPlus offers alternate financing programs that address unique needs.
LendPlus was founded by Managing Partner, Jacques Poujade around 10 years ago. With three decades of experience, he is a knowledgeable financial expert who uses his experience and expertise to assist his clients and his team. As a financial services professional, he has been successfully navigating the mortgage industry for over 30 years.
For additional details, you can follow him on Twitter at https://twitter.com/PoujadeJacques and Facebook at https://www.facebook.com/JacquesPoujade.