8 Steps to Boost Your Credit Before You Buy

Building good credit is an important part of buying a home, so be sure your credit score is good before you start searching for a home.

Having good credit opens lots of doors when it comes to buying a home and bad credit can close them. And now that the new Qualified Mortgage Rules have made mortgage applications and qualifying for a loan more challenging, having good credit has become a more crucial factor in owning a home.

Wondering how to fix your credit? Just follow these nine steps to strengthen and solidify your score.

1. Get your hands on your credit report

If you don't have a current report on hand, get one now. You need to be aware that serious and sometimes even minor issues, can take months to repair. There are a variety of ways to get your report, and you're entitled to a free credit report once a year under the FACT Act.

2. Mistakes happen: Get them fixed

Every year, 25% of the people who are denied for a mortgage have errors in their credit reports. You can find step-by-step guides on how to file a claim on any of the credit bureau websites. Keep a good record of your disputes, including copies of any documents you file with the bureaus. Once you make an initial claim, you should get a response within 60 days.

The 3 main Credit Bureaus are:

www.equifax.com

www.experian.com

www.transunion.com

3. Stay current

Pay your bills on time. If you are looking to increase those scores over time in a clear and steady upward climb, never miss a payment. Ever!

4. Pay more than the bottom line

Always make more than the minimum payments on your revolving credits each month. A history of only minimum payments is not an attractive indicator for anyone reviewing your credit report. Always pay more, Not only will you chip away at your balances faster, you will save on the total amount of interest handed over to your bank.

5. Maintain low balances

Avoid carrying a balance that's more than 50% of your limit on each card, and pay those debts down below the halfway mark as soon as possible.

6. Don't move it, lose it

Pay off the debt on your existing card, don't just move it to a new one. You will pay off debt quicker if you just work hard to pay off what's on the card you already have.

7. Don't cut cards

Pay off all your credit cards, but DON'T CLOSE any of them before you apply for a mortgage.

8. Keep your old car

Any significant buys can alter your financial picture, and banks don't like to see sudden changes just before approving a loan. Even without any dings on your report, you'll want to make sure all your credit cards are paid up prior to qualifying for a loan. Pay down your debt, then lock up your credit cards until your credit score has been checked and you have been approved for your mortgage.

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Whatever your looking for we will help you find it! Our agents go above and beyond the normal to give you the extraordinary! So give us a call at 575-377-2626 in Angel Fire, 575-758-5852 in Taos, or speak to an agent directly at 575-770-3306. Let us serve and welcome you to this truly magical area.