Are you thinking about buying a home in St. Louis? If so, do you know what your credit rating is? Your credit score is a huge determining factor as to if you’ll qualify for a home mortgage. The first step for anyone who’s looking to buy a home with the assistance of a home loan is to get their credit up to par. Here are some tips on getting your score to where it should be.

Request and Review Your Credit Reports

Mortgage lenders look for three components when determining eligibility for a loan: steady income, a down payment, and a strong credit history. You’ll need to request your credit report from each of the three major credit reporting agencies (Experian, Equifax, and Transunion) too, as they may each have different information.  

This may seem tedious, but it’s also important to go through each of the reports with a fine-toothed comb. Look for inaccuracies such as misspellings of your name, incorrect addresses, and items that you’re not familiar with. Check for any late payments, charge offs, bills in collection, or judgements and highlight them. These are the items that can harm your credit resulting in a lower score.

Report any Inaccuracies

If you find items on your credit that are inaccurate or have any kind of error, report it to the credit bureau. For example, if you have a charge off on your report but your name is misspelled or your address is incorrect, report it. If you have a late payment reported but know you have made your payments on time, report it and provide your payment history to have it removed. Each delinquent item on your report dramatically affects your score in a negative way, and reporting misinformation will have those items removed and your score will vastly improve.

Pay off any Delinquent Accounts

As for the delinquent accounts that are accurate, pay them off and provide proof of payment to the credit bureau. A mortgage lender wants to see that your credit history is stable and responsible. Delinquent accounts such as late payments, charge offs, bills in collection, and judgements are red flags to lending institutions and can result in your mortgage being denied. 

Build your Credit

What happens if you haven’t established your credit? As odd as it may seem, no credit can be just as damaging as bad credit. Lenders are looking for a credit score in the 700s. That score is built by obtaining credit and acting responsibly with it. If you don’t have a credit card, car loan, or other type of revolving credit, it may be time to do so. Just applying will not do the trick – you’ll need to use the credit and show that you can make the payments on time. Once you have established a history of doing this, you’ll start to see your credit score improve.

Hold Off on Incurring New Debt

If your credit is already established, hold off on applying for any new credit. The lower your debt to income ratio is, the better you look as a potential mortgage candidate. So,hold off on buying that new car until you have closed on the purchase of your new home.

Your credit score is usually the first thing that lenders look at when you’re trying to buy a house. Typically, to obtain a home mortgage with a low interest rate, lenders are looking for a credit score of 720 or above. You may have some work to do to reach that score but it’s attainable if you follow these tips.