Whether you rent or are planning to buy, a good credit score is a powerful tool in your next home search. In between moves, a good credit score contributes financially by lowering payments! If improving your credit score is on your To Do list, here are 7 strategies to get that number climbing from AHRN.com!
1. Check Your Credit Report
It’s important to know what is on your credit report and ensure that all of the information is accurate. By law, each year you can get a free copy of all three credit bureaus records – Equifax, Experian and TransUnion – through AnnualCreditReport.com.
2. Dispute Any Incorrect Information
Military personnel can be vulnerable to slow pays due to Tricare or accounts left open when you PCS. Address any incorrect reports with the lender. Look for mistakes, and dispute any errors with the bureau, which has 30 days to remove them.
3. Pay Down Your Credit Cards
Improving your debt to credit ratio by paying down or paying off your credit cards can make a big difference in your credit score. Ideally, your balance on revolving lines of credit will be 10% or lower when you apply for a mortgage.
4. Ask For “Goodwill Adjustments”
If you have an account with old late or missed payments, you can ask that the lender “re age” the account after 12 or so on time payments and erase that negative report. These requests will usually need to be in writing.
5. Ask For A Credit Increase
If you have credit cards in good standing that haven’t had a limit increase, ask for one! This is a simple way to improve to debt to credit ratio to reach that 10% balance!
6. Don’t Automatically Close Old Accounts
It can be tempting to close accounts that you don’t use regularly, but it may negatively impact your credit score. Having a long term history with a lender is valuable and closing the card will impact your debt to credit ratio, especially if the account has a high limit.
7. Keep Those Old Accounts Active
Although you want to keep your balance on your credit cards low, they do need to be active accounts. Set up small, monthly bills to be paid with your credit card to keep the card open and build more credit history.
Improving your credit score so you can buy your dream home? Browse VA Loan resources and information to get prepared for your dream home search!