First-Time Home Buyers | 8 Ways to Improve Your Credit Score

Credit scores, along with your overall income and debt, are a big factor in determining if you'll qualify for a loan and what the loan terms will be.

1. Check your credit annually! Check for and correct errors in your credit report. Mistakes happen, and you don't want to be paying for someone else's poor financial management.

2. Make loan payments on time every month!

3. Reduce your debt! Pay down credit card bills. If possible, pay off the entire balance every month. CAUTION: Transferring credit card debt from one card to another could lower your score. Use credit cards wisely, and only apply for the credit you really need.

4. Don't charge your credit cards to the maximum limit! This will show lenders that you have spending control.

5. Wait 12 months after credit difficulties to apply for a mortgage. You're penalized less for problems after a year.

6. Do NOT purchase big-ticket items for your new home on credit cards until after your home is closed. In addition, don’t apply for a new car loan either! The amounts will add to your debt-income ratio.

7. Don't open new credit card accounts before applying for a mortgage. Even if you don’t have a balance, having too much available credit can lower your score.

8. Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

For more information go to Knowing and Understanding Your Credit/Fannie Mae Foundation



It's a great day to buy!

Teresa Kolb


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