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New Year New You New Credit Score
One of the things we focus on so much going into the New Year is improving ourselves. We set resolutions and focus on getting in better shape and checking items off a list. Well if one of those items is a new home then we should add our credit to the fitness program. Improving your credit score doesn't happen overnight, just like getting yourself into shape, but you can make changes that will have a great positive impact. These changes can add up to an increase in your credit score, making it easier for you to qualify for a loan, or a new car, or a mortgage and get better rates when you do qualify.
Step 1: Talk to a professional
One of the most common mistakes that we make is to start changing our credit habits and actions or doing something drastic without actually seeing where you are to begin with. You can pull your own credit score online, but it is usually easier to sit down with a mortgage officer and have them take a look at your credit and give you a step by step plan to improve and see if there are any issues with your credit you need to address right away.
Step 2: Setting up good behavior
Two of the biggest contributors to your credit score is your payment history and your credit balances. That means is if you are consistently making on-time payments and getting things cleared off your credit score regularly it can make great improvement on your credit score. The biggest thing to set up is that if you have anything past due on your accounts, you should get those current as quickly as possible. You should also either set up a routine schedule for yourself so that you are not late with payments or set up auto-pay on your accounts so do don't miss a payment. You can also just set a reminder on your phone for the due date if that will help you. As far as your credit balances, you want to make sure that you are not maxing out your credit cards. You want to pay down the balance so you have a good portion available.
Step 3: DO NOT CLOSE ACCOUNTS
One of the biggest mistakes people will make is that when they are paying off their credit is to close the account so that they won't spend it again. That is a big no no. One of the things that builds your credit is how long you have had your lines of credit. If you have to keep re-opening credit lines, that can actually show up as a bad thing. So when you pay off a credit card instead of closing it, I recommend putting it in the freezer, locking it in a drawer, or hiding it from yourself. Anything but closing the account.
Step 4: Look for mistakes
No body is perfect and that goes for the credit reporting companies. There are sometimes mistakes that get put on your credit score, and they can hurt it. I would recommend that you look through and see if there is anything that doesn't match up and you can then dispute those issues to improve your credits core.
Step 5: Get your credit cleaned up now!!!
If the New Year is coming up and one of your resolutions is to get a new house, but your credit needs some work, then call me. I will get you in touch with an excellent mortgage lender who can help you get working on your credit!
I have been involved in the real estate world since I bought my first home in 2014. I am an Idaho native and was born and raised in Middleton, Idaho. I graduated and moved to Boise in 2010 and have be....
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