Boost Your Credit Faster
If we said we can help you improve your credit score by more than 50 points in a month, would you believe us? It happened!
A prospective home buyer came to us to get pre-approved for a home loan, but their credit score was below 620, which meant the interest rate they would pay took them out of the running for the house they wanted.
The great news is, we have strategies to help clients boost their credit score – and even expedite the boost. This client’s score jumped by 60 points in under a month! They qualified for a .75% interest reduction, and it made all the difference. Today they’re living in their new home.
Ways to Boost Your Credit Score
When you work with First Class Mortgage, we have a credit simulator that can help you see exactly how to improve your credit score. But first, here’s some helpful information to get you started.
Your credit score is a number on a scale of 300 to 850. You may have heard it referred to as a FICO score or Vantage score. The number fluctuates over time, so think of it as a snapshot that can and will change, based on many factors.
How can you boost your score? The first step is to get a copy of your credit report and study it for errors. Statistics show that one-third of Americans never look at their credit report. That’s too bad, considering there are practical ways to fix errors on that report. In fact, 79% of consumers are successful in having disputed errors removed from their credit report (Credit.com).
You can get a free copy from each of the credit bureaus every year. You should never need to pay for your credit report, so don’t fall for the gimmicks. Visit annualcreditreport.com to get your credit report.
The three credit bureaus, Experian, Equifax and TransUnion, all have different ways to calculating your credit score, so don’t be surprised if your score varies among them. Also, note that when you get a copy of your credit report from one of these agencies, your credit score may not appear. That’s because their primary job is to compile a report of credit activity for consumers like you.
Your credit score is determined by these factors:
- Payment history (35%): Do what you can to pay bills on time since late payments may lead to a lower score.
- Amounts owed (30%): Reducing the amount of your debt can be the key to improving your credit score.
- Credit history (15%): A longer history of responsible credit use may lead to a higher score. In other words, don’t cancel your oldest credit accounts since that history can be valuable as you strive to boost your overall score.
- New credit (10%): Opening several accounts in a short period of time can lower your score. Be especially mindful of this as you start the home-buying process. Don’t finance a car and open a credit card account right when applying for a mortgage.
- Types of credit used (10%): Having experience with different types of credit can help your score. Think car loan, student loan, credit card. But, be cautious about owing more than you can pay since payment history and amounts owed are vital to your creditworthiness.
There are many ways to improve your credit score by building a solid credit history. Home ownership can be a big piece of making that happen, mainly because you’ll be in a better position to improve your credit if it’s part of a larger goal of buying a home.