Tips for Improving Your Credit Ahead of Buying a Keller Home

When it comes to obtaining a mortgage loan, one of the first steps you should take is ensuring your credit score is acceptable. The higher your credit score, the more likely you are to be approved for your loan. Even more importantly, those with higher credit scores receive better interest rates and loan terms. As a result, your credit score could potentially help you save tens of thousands of dollars over the lifetime of your loan. Therefore, if you know purchasing a home is in your near future, it is a good idea to start taking steps now to improve your score. To that end, here are five tips for improving your credit score.

Tip #1: Check Your Credit Report

Perhaps the easiest step you can take toward improving your credit score is to simply check your credit report. Even the slightest error can have a negative impact on your credit score, so be sure to check it over correctly and to contact the credit reporting bureau with any errors that you find. You can obtain a free copy of your credit report from all three major credit reporting bureaus by visiting AnnualCreditReport.com.

Tip #2: Pay All Bills on Time

You can also improve your credit score by ensuring all of your bills are paid on time. The best way to accomplish this goal is to create a calendar containing the due dates of your bills as well as the dates when you get paid. For each payday, assign specific bills that you will pay at that time. This way, you don’t accidentally miss a bill and find yourself needing to play catch-up to get them paid.

Tip #3: Don’t Open New Accounts

Every time you open a new line of credit or other similar account, there is a new inquiry placed into your credit report. These inquiries have a negative impact on your credit score. So, while it may be tempting to apply for a line of credit at your favorite store in order to take advantage of a discount or other attractive deal, it is probably in your best interest to pass up the deal in order to maintain a higher credit score.

Tip #4: Keep Old Accounts Open

If you have a bunch of credit cards, you might think that it is a good idea to cancel them all. In reality, if you have an old credit card that you have been faithful about repaying, it is better for you to keep that account open and on your credit report. Old accounts demonstrate that you have a history of repaying your debts on time. With that said, if you have several accounts open, closing some of your newer accounts could be a good move. This is because your credit score will be negatively impacted by having a large amount of revolving credit available.

Tip #5: Pay Down Debt

The amount of debt that you are currently carrying will also have an impact on your credit score. It is important to remember, however, that it is not just about the amount of debt you are carrying, but also how it is distributed. If you have a credit card that is maxed out with a $5,000 balance, this will hurt your credit more than having the $5,000 debt spread out over a couple of credit cards that are far from maxed. So, in addition to paying down your debt, be smart about how you distribute the debt that you do have.

To learn more tips for improving your credit score and to view real estate opportunities in the Dallas-Fort Worth region, contact our team of experienced real estate experts today.

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