Building Up Your Credit to Buy a Home: 5 Steps to Take

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Building Up Your Credit to Buy a Home: 5 Steps to Take

If you are seeking to purchase a home and your credit rating needs improvement, you can take some concrete steps to increasing your score on your own. Developing a personalized strategy on how to improve your individual credit score is one that we can help you with at ubermortgage.com but for those of you who want to do it on your own. Here are 5 DIY actions you can take going forward to help improve your credit score.

  1. Pay down the largest debts. The best way to improve your credit score is to lower your credit utilization percentage. This means paying off credit cards and focusing on the largest balances first. In general, it’s a wise practice to keep your balances at zero or less than 30 percent of the available credit. People with the highest scores frequently keep the balances below 10 percent of the available credit.

  2. Make timely credit card payments. Pay within the grace period, which is typically 10 days, and avoid late fees. When you make a payment 30 days past the due date, each of the three major credit reporting companies will receive notification, and this will damage your credit score. If you have a tendency to forget, sign up for automatic payments to stay on time.

  3. Make payments above the minimum payment. Making minimum payments will typically only pay the interest on the credit card debt. You will not make a dent in the balance, and that should be your goal if you desire to become a homeowner.

  4. Review credit reports for mistakes and have them fixed. By law, the three major credit reporting company must supply you with one free credit report per year when you request one. Document any errors you find and write to each company requesting that the error be corrected. Be painstaking about providing the evidence of the error and keep records. This is an excellent way to improve your scores.

  5. Keep older accounts open even if they have a zero balance. The age of your credit is included in your credit score. Older credit cards that have been properly managed give you brownie points towards an improved score. It may be tempting to close an account you no longer use regularly, but this can have a detrimental impact. In addition, a closed account will not drop off of a credit report for quite some time. Lenders want to see that you manage available credit wisely rather than closing accounts.

These five steps will help you build a foundation that improves your credit score and bring you closer to the dream of homeownership. Follow them judiciously and methodically for the best results, and you should start seeing changes within months. Better yet, contact us at Ubermortgage.com to let us guide you through the process of the best strategy for you as an individual.


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