The national average credit score is 695 and half of consumers fall in the desired 700-plus range. You can get a mortgage with that score or even lower, but you need a score of 740 or higher to get the best rates. While credit history isn’t created overnight, there are some things you can do to improve your credit score quickly.
- Pay down your debt/balances – The amount you can borrow versus the amount of debt you are carrying over can affect 30% of your credit score. If you have the cash at hand, try to time your payments before the creditors send in their reports. If you don’t know when they are sending them in, you can call them up and ask. You want to try to lower your debt carrying over before the date of the report. The results will be shown in about one month.
- Get a handle on your bills and pay them on time – We’ve all heard it, pay your bills on time and the reward at hand will be a good credit score. However, we all slip up and we may be late once in a while. If you are already late on a payment, make that payment A.S.A.P.! If you normally pay your bills late and you start paying on time, you will see your credit score rise in a month or two. Also, if you are less than 30 days late, you should make a payment before the 30 day mark! Creditors don’t typically report late payments until after the 30 day mark, so try to control the damage as soon as you can!
- Open a new account – When you open a new line of credit, your total outstanding line of credit will go up and the utilization will improve as well. Also, having multiple lines of credit will show the credit bureaus that you can juggle different kinds of accounts. However, don’t go credit card/loan opening happy! Try an additional one at first. If you apply to every line who asks you to open a new card, you will take a hit on the number of recent inquiries and that will not look good to the credit bureaus since it shows you are desperate for more money.
- Become an authorized user – Do you have a responsible family member or significant other? If you become an authorized user on their accounts, their good credit history will be piggybacked onto yours as well too. Their good credit history will immediately show up on your report. If it’s old, established history, it will also increase the average age of accounts you’ve managed that will increase your score. However, be careful on who you piggyback with. Just like their good credit history will show up on your account, their bad history and high debts will also show up as well! You will be able to see the results immediately when you perform this task.
Think these tips will help you get a better rate on your mortgage? Do you make it to the national average or are you so close to that 740 mark? Give us a call and let us help you out.