In the first two installments in our Credit 101 series, we discussed the different types of credit scores and what you need to know about credit reports. In fact, contesting errors you find in your reports is one way you may be able to improve your credit score. But what are some other techniques for raising your score before you apply for a mortgage? Let’s go over some suggestions.
Improve Your Credit Score Tips
- Get current on your bills. One of the simplest things you can do to raise your credit score is to catch up on any bills you may have fallen behind on. Already current on your bills? That is great! Keep up the good work and continue paying them in full and on time.
- Ask creditors to remove one-time offenses from your credit report. We talked before about how you can check your credit report and contest any errors you encounter. But what about negative entries that are valid? In a lot of cases, there may be nothing you can do. But in some situations, you might be able to negotiate to get some items removed. Say, for example, that on the whole, you have an almost faultless record with a creditor, but you missed one payment one time. If it is clear to the creditor that this was a one-off and unlikely to happen again, you might be able to convince them to remove the entry if you are currently in good standing. Be polite when you make this request, as they are not obligated to comply. But if they trust and value you as a customer, they may follow through.
- Get a secured credit card. How can you build credit if your score currently does not qualify you for a regular unsecured credit card? The answer is to apply for a secured credit card. When you apply for this kind of card, you make a security deposit which acts as collateral. That deposit will eventually be returned to you when you qualify for an unsecured card. A useful thing about secured credit cards is that you can raise your credit limit simply by depositing more collateral. We will talk more about the benefits of doing this below.
- Reduce your credit utilization. Are you utilizing more than 30% of your credit? If so, that is not ideal from a lending standpoint. See if you can reduce your credit utilization so that it drops under 30%. If you do not have any debts you can currently pay off, you can try reducing your utilization indirectly by raising your credit limit (see below).
- Raise your credit limit. Are your credit accounts in good standing? Do you have a strong, established relationship with your creditors? If so, you can request that they raise your limits. If your limits are higher, even if you still have the same amount of debt, your credit utilization as a percentage will drop. You will have the best luck with this approach if you provide an actionable request. Name a specific amount. Make sure that it is low enough to be realistic but consider aiming just above the amount you want. Why? Because the counteroffer, if there is one, maybe just what you are hoping for.
Get Personalized Recommendations on How to Boost Your Credit Score
Now you have some tips for raising your credit score. In future installments in this series, we will talk about credit score do’s and don’ts as well as credit score myths. Both will give you further context for raising and maintaining your score. When you contact Community Mortgage, we can offer you personalized tips and tricks for raising your credit score fast. Regardless of your score, we will work hard to connect you with a competitive mortgage so you can move into your dream home. Ready to get started? Please call us today at call 619-692-3630 to schedule your consultation.