Improve Your Credit Score
by
Jim Newell 
If you’re looking to buy a new home or any real estate, you’re going to need a mortgage. When you apply for a loan there are no guarantees, so you must focus on making the application look as good as possible to mortgage lenders. Many things are considered during this process, from your current earnings, to the amount of money you have in the bank, to your other debts and assets. One of the most important points, though, is always your credit score.
If you’re confident that you can qualify for, and manage a mortgage for your Indianapolis home, start the process before you start your home search. Often, the best homes and best values are only on the market for a short time. A potential buyer with a pre-approved mortgage letter has a better chance of having their offer accepted quickly.
But what if your credit score is not where you’d like it to be, and you still want to find a Greenwood or Fishers Indiana home for sale to buy for your family? While starting the home search now is not a bad idea, you need to start working on improving that score. This way, when you find the perfect home, you know you can actually make it yours.
Eliminate Your Small Debts
Small debts are often known as “nuisance debts.” You absolutely want to get rid of these. For example, you may have one credit card that you use for almost everything, with $1,000, $2,000 or even $3,000 going on it every month. You may have two other cards that you just use for a handful of purchases, so there’s never really more than $100 on them. Pay those off first and consolidate what you owe, and it looks better on your score.
Keep Credit Card Debt Around 30%
You also don’t want to max your card out every month, even if you can pay it off. You typically want to only have revolving debt on the card that hits about 30 percent of your monthly income. This way, it doesn’t appear that you’re just scraping by, barley making it from month to month.
Understand Good Debt
Sometimes, people try to repair their credit by getting all of their old debt taken off of the report. Doing so isn’t wise. Good debt is debt that you once had, that you paid off as you were supposed to, and it actually boosts your score. If you bought a car, paid on it every month for five years, and paid off the whole loan, that helps. Never ask for those good debts to be removed.
Don’t Check Your Credit Too Often
Checking your credit score has become all the rage lately, with many websites popping up and offering to let you do it for free, but checking it actually causes it to drop. If you’re constantly looking at it, lenders figure you’re very involved in creating more debt for yourself, always seeking new credit lines, and that is a red flag. Only check it when you have to.
Never Miss Payments
Not skipping payments may be obvious, but it’s the most important thing you can do. Don’t miss payments on anything–your car, your phone, your credit card, your insurance, or anything else. Definitely don’t neglect these payments entirely, and always strive to make them on time, every month. Timely payments are the key to keeping your credit score as strong as possible for your entire life.
We’re here to help you find the right home at the right price, and get in it quickly. You can help by getting your credit score into shape now.
