When you are a first-time home buyer, you quickly find out how important your credit score is.
So, before you approach a lending institution for a loan application, it only makes sense that you do a little work to improve your score as much as you can.
Below are five tips to ensure you get the best credit score possible.
1. Request your credit report and dispute any errors you find
Errors are certain to negatively affect your score. It is your job to find them and eliminate them. Begin by visiting AnnualCreditReport.com, the only federally authorized website that provides free credit reports. Look for mistakes in your personal information, as well as credit lines that don’t belong to you, duplicate entries, incorrect account status, or other errors that could lead to a lower score.
2. Dispute the errors
A report by the Federal Trade Commission found that one in five consumers had mistakes on at least one of their credit reports. It’s more common than you think. If you find errors, go to each bureau’s website and learn their process for disputing errors. Include as much documentation as possible. You should also contact the organization that reported the bad information and ask them to update their records with the bureau.
3. Increase your credit limit
Contact your credit card company and ask them to increase your credit limit. An increased credit limit can improve your debt-to-credit ratio, which compares how much you can borrow and how much you owe. But be careful, credit card issuers often will do a credit check before approving an increase.
4. Erase one-time mistakes
Mistakes happen. We’re all only human, after all. If your credit report shows a late payment, you should request that it be removed from your credit report. If it was a one-time mistake, and the rest of your report shows you consistently made on-time payments, most companies will agree to remove it. However, you should be sure to adhere to a regular payment schedule moving forward so that your report stays clean.
5. Ask for a “rapid rescore”
A rapid rescore raises your credit score quickly after you have cleaned up your reports with the three major credit bureaus. Rather than taking weeks—or months!—rapid rescore can lift your score by 100 points in a matter of days. Taking the initiative to request a rapid rescore could be the difference in whether your mortgage application is approved by the lender.
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