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If you’re planning to buy a home in St. Louis, you probably already understand the importance of your credit score when it comes to getting a mortgage. Too low a number can significantly decrease your ability to get an attractive interest rate on a loan. If you plan to buy a house in the near future, you should check in on your where your credit score stands currently and take whatever steps you can to raise it. You may not be able to boost your score overnight, but with a little time and effort, you can make positive changes and ensure you’re in the best possible position when the time comes to explore loan options. Here are a few strategies that can help:
Get a Copy of Your Credit Report
Once you’ve obtained an updated report and know what your credit score is, it’s important to find out how it got that way—especially if it seems lower than you expected. Obtaining a copy of your credit report is easy, and in many cases, free. When you examine the report, make sure there are no errors you need to dispute. Disputing anything on the report is a simple process, and it puts the burden of proof on the creditor. In many cases, they don’t respond in the time allotted and the credit agency pulls the negative mark from your record.
Automate Your Bills
Each late payment hurts your credit score. If at all possible, setting up automated payments for your bills can be a quick fix. We all get busy, and occasionally getting everything paid on time slips our mind. Setting up automated payments means that no matter what else is going on your life at the time, your bills will get paid. Automating payment might not be an option for every bill. For payments you can’t automate, setting up a phone or calendar reminder can keep you from making mistakes. While the occasional late payment might not seem like a big deal, over time they can have a substantial impact on your score.
Create a Plan to Pay Off Debt
Debt is another factor in a low credit score. Almost everyone carries some debt in one form or another. Focus on finding out which accounts have the highest interest rates, and make paying down those balances a priority. Making consistent payments to lower any debt will result in a credit-score increase.
How Much of Your Available Credit is in Use?
The other number you need to think about is your credit utilization ratio. That’s the current amount of available credit that you’re using. This plays a valuable role in determining your credit score, and you want to keep that ratio as low as possible. Keeping your credit use below 30% of available credit is recommended, but if you’re really striving to improve your score, 10% or less is a great goal to shoot for.
Request A Higher Credit Limit
Another way buyers can try to improve the credit utilization ratio is by requesting higher credit limits. It’s not an option for everyone, as you’ll need a decent credit score. But, if your score is fairly good and you simply want to raise it a few points, this strategy is worth looking into.
So, as you see, it’s very possible and even fairly easy to improve your credit scores. We’d be happy to speak with you about where you want your credit scores to be before getting a mortgage. And, if there’s anything we can do to help, we’d be glad to.