Buying your first home is an exciting time for you and your family. There are plenty of decisions that need to be made, and it's easy to get caught up in the moment. Before finding the right home for you, reviewing finances, including your credit score, is essential.
Your credit score doesn’t only affect your ability to be approved for a loan. The interest rate and other factors can be affected by your FICO score.
Ways to Improve Your Credit Score
The first thing to do is to get a copy of your credit report. You can receive a free copy once a year from any of the credit bureaus. Go to www.freecreditreport to request your report from TransUnion, Equifax, or Experian. Once you receive your report, review it for errors or missing information. If you find any inaccuracies, file a dispute with the credit reporting agency.
Paying down your credit card and/or loan balances may affect your credit score.
Making late payments on loans and credit cards can lower your credit score, and late or missing payments are kept on record for seven years. The impact on your score reduces over time. Consider setting up automatic payments to ensure that creditors receive payment by their due date.
In the months before applying for your mortgage loan, be aware that new applications for credit and/or inquiries in your credit report can have an effect on your credit score. Opening new credit or closing accounts can also impact your overall credit utilization ratio and credit score.
Working on improving your credit score takes time. Be patient, and know that your efforts can pay off. If you want more information on options for mortgage loans, NASB is here to help. Our experts can be reached at 855-465-0753, or you can download our NASB eBook, So You’re Thinking of Buying Your First Home?
NASB does not provide credit counseling advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, credit counseling advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.