5 Ways to Improve Your Credit Score Before Buying a Home

Your credit score is extremely important when it comes to buying and insuring your home. It affects your rates and your ability to get approved. If you’re planning to buy a home this coming Spring or Summer, start planning for it now. It can take several months to see a significant change in your score. Here are 5 ways to improve your credit score before buying a home.

Fix Credit Report Mistakes

Visit CreditKarma.com and set up a free account. This grants you access to your Transunion and Equifax (two of the 3 major credit bureaus) credit reports. Review the details of each report, focusing on anything negative that may appear in them. If you find any mistakes, contact the particular credit bureaus to get them fixed. Removing incorrect or derogatory information is one of the most significant ways to improve your credit score.

Reduce Credit Card Use

It’s the holidays, which means you’re probably going to charging a lot to your credit cards. If your credit card balances reach 30% or more of your available limits, your score can drop by as much as 50-100 points! To avoid this, be sure to pay off your balances after holiday shopping, or at the very least, pay enough to remain below the 30% mark.

Pay Bills on Time

Your payment history also has a high impact on your credit score. To Improve your credit score, always make payments on-time! Even one missed or late payment can drop your score and remain in your credit report for several years. Thus, diligence will go a long way here.

Don’t Open New Accounts

A factor that has a medium impact on your credit score is the average age of your credit accounts. An average of 7+ years is considered good. When you open new accounts, it reduces the average. Therefore, it can drop your score. With holiday shopping and so many discount offers, it may be tempting to open new cards at this time of year. If you’re planning to buy a home, resist that temptation! It will ultimately cost you a lot more than the discount offer.

Buying a Home in 2018

Buying a home is not something you can easily do on a whim. It takes time and planning to save money and improve your credit score. There’s no better time to start that planning than now! We hope that the above tips to improve your credit score before buying a home will help. Enjoy the holidays and good luck with your future home sale. Lastly, don’t forget to call us for a free estimate on homeowners insurance. We can help you find ways to save even more money on your home.