Most people looking to buy a home in today’s market need to first engage in some sort of credit repair. Unfortunately, most people make mistakes when they attempt to repair their credit. If you would like to improve your credit score, follow these easy steps to see quick results.
Pay off debt
Without a doubt, one of the fastest ways to improve your credit score is to pay off your revolving debt. This is one thing you can do that will impact your credit score almost immediately. Ideally, you want each account to have a balance that is 25% or less than the total limit.
Clean up errors
Did you know that almost 85% of all credit reports contain some type of error? These errors can be significant and can result in you having to pay a higher interest rate, or even be turned down. For this reason, you should review your credit report at least six months prior to purchasing a home. Here are key things to look for:
- Revolving balances – Are your credit limits reporting correctly? Limits reporting too low can dramatically lower your credit score
- Accounts that don’t belong to you – Do you have collection accounts that you have no idea where they came from? They may not even belong to you but rather, someone with a similar name
- Old Accounts – Under the Fair Credit Reporting Act, accounts can only be reported for 7 years from the date of last activity. If you have old accounts that are negative, you can dispute these to get them removed. An important thing to note is that bankruptcies, tax liens, judgments and child support can remain on your credit for up to 10 years.
- Delinquent Activity – Do you have late payments showing when you are sure your payment make it there in time? Cleaning up these errors can improve your credit score
By following these easy credit score repair steps, you can easily qualify for the home of your dreams!