If you are wanting to buy a home but have bad credit, do not despair! There are ways to clean up your credit report in a relatively short period of time in order to qualify for the mortgage needed to get The Woodlands, TX home that you want. Also, your credit doesn’t have to be perfect in order for you to buy a home. If your credit history shows improvement in recent months there are many lenders who will be willing to work with you. Here are tips to improving your credit:
Correct all errors on your credit report
The first step to cleaning up your credit is request a free credit report. Free credit reports are available on an annual basis from the top three credit reporting agencies and they may be obtained through this website. Look over your credit report and dispute anything that is incorrect, including credit limits. The highest, most recent credit limit should be listed for each account. You may also ask to have anything over seven years old removed from the report.
Pay off all outstanding debts
Having outstanding debts–especially something in collections–puts a big mark on your credit score and will get in your way of obtaining the mortgage you want. Call all creditors immediately to negotiate payment of your outstanding debts. If you have not made payment on the debt for several months, the creditor might be willing to work with you and allow you to pay only a fraction of the debt if you’re able to pay it in one lump sum. Once overdue debts and items in collections are taken care of, contact the credit reporting agencies to make sure this is reflected in your credit report and score.
Start paying everything on time
Maybe you have a history of making late payments. While you can’t do anything to rectify problems you’ve made in the past, you can clean up your act now. Send all payments on time from here forward in order to show improvement and start building healthy credit.
Ask for increased credit limits
A good portion of your credit score is determined by your credit-to-debt ratio. One way to improve this ratio is by paying down debts. Another way to improve this ratio is by increasing your total amount of credit. That is why asking for increased credit limits or taking out additional lines of credit is a way to improve your credit score. That said, once you receive additional credit, do not use it! If you use it, the ratio will not be improved.
Hopefully these tips help you improve your credit score so you can be approved for The Woodlands, TX home of your dreams. If you want professional assistance with obtaining a mortgage or buying a home, do not hesitate to contact me!