Email Post to a Friend: How Do I Increase My Credit Score to Buy a House?

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August
19

Improve Credit Score
So you're itching to get started shopping Chattanooga homes for sale to become a homeowner, but you'll need a mortgage loan to realize that goal. Given that fact, you'll certainly want to get your credit report in shape to ensure that you can get approved for that loan – and that you can get the best possible interest rate on it when you do. So how does an aspiring homeowner go about raising their credit score? Here are tips that can help:

  1. Check your credit report for errors
    Your credit reports are documents that detail your track record with credit, outlining factors that include how much debt you're holding in relation to your income and how responsible you have been in paying off that debt. There will be three major reports detailing your credit history, held by three major credit bureaus; Experian, TransUnion, and Equifax. While these bureaus know their business, they rely on information collected from your creditors to compile their reports, and errors are fairly common. For that reason, getting copies of your reports from all three companies and examining them for errors is an important first step if you're working to raise your credit score. If any of your reports do contain errors, contacting the credit bureaus to get them corrected is your next step.

  2. Use automated payments for regular monthly bills
    We're all busy these days, which can lead to bills being paid at the last minute or even beyond their due dates. While this can happen to anyone, if it happens too often to you, your credit score will suffer. You can safeguard against this issue to protect or raise your credit score by setting up automatic payments for all regular bills that offer this option, leaving you fewer due dates to keep track of every month.

  3. Pay down your credit card balances
    If your credit card balances are high, nudging up against your credit limit, this can lower your credit score. To raise your score, reduce your balances to around 25 percent of your credit limits, which presents an image of responsible debt management.

  4. Make credit card payments early
    Check the closing date on your credit card statements, then try to make your payments before that date every month. The benefit of this is that the balance recorded on your statement – and sent to the credit bureaus – will be reduced by the amount you've paid. This means that by paying early, you can make your balances look lower on your credit reports, which can boost your credit score.

  5. Take steps to add positive information to your report
    The more positive information in your credit report, the higher your score. A secured credit card can be a good means for adding positive information, as can a credit-builder loan. Your local credit union can help you out with information on these methods. Another good way to add positive information is to find a friend or family member who is willing to add your name, as an authorized user, to a credit account in very good standing. You won't have to use the account at all for the account holder's responsible credit use to reflect favorably on your credit report.

If you would like more information on how to raise your credit score as you prepare to buy a house, contact us. Our real estate agents are always happy to do what they can to help people turn dreams of homeownership into reality.