How to Boost Your Credit to Buy a Home

Most people dream of owning a home one day, and for many, the dream becomes a reality. If you have bad credit, that dream may feel very far off in the future. The good news is that you can take steps today that may influence your credit score, improving it so that you are eligible for a mortgage.

Are you ready to say goodbye to bad credit and hello to a new home? Follow these tips to improve your credit score and move into the house you've dreamed about.

Reduce the Balance on Your Credit Card

Do you carry a balance on your credit card from month to month? Many people do, but this isn't the best idea for your score. Part of your credit score is based on the amount you owe on credit cards, and lenders like to see that you carry less than 30 percent of the available balance.

The secret here is to pay off those balances as quickly as possible. The earlier you do this, the better. The credit agency will take some time to report your balance to agencies. Ideally, you can pay off the full balance of your credit card at the end of every month.

If you have a good payment history with your credit card company, you might also consider asking for an increase in your line of credit. This will reduce the percentage of your balance you utilize. Ensure that you do not spend more on these cards in the meantime, though.

Become an Authorized User

If you have a family member or loved one with excellent credit, you might ask to become an authorized user on one of their accounts. This measure can give your credit a slight boost if this person maintains a solid reputation.

Understand Your Credit Report

When was the last time you checked not only your credit score but your entire credit report? It is time to request one of your free copies and grain a solid understanding of your financial history.

One important reason to look over your credit report is to try to spot mistakes. Many people do not realize that they can dispute some of the problems on their credit reports online. Disputing problems on your report could increase your credit score if the problem brought it down.

Avoid Opening New Credit Accounts

The average age of your credit accounts can make a significant difference for your score. Lenders want to see a long history of responsible credit use, so avoid buying new cars or opening new lines of credit until after you secure your mortgage.

An exception might be made if you do not have a good mix of credit. Lenders might like to see that you don't only have credit card accounts but also that you have a loan for a vehicle.

Additionally, you should not close very old accounts if they are in good standing. Those old accounts are increasing the average age of your credit, which makes you a much more desirable candidate for a mortgage.

Work With Somebody to Find a Mortgage

Some companies work toward helping people find the right mortgages for their situations. Even if your credit is not perfect, you may be able to secure a mortgage. A reputable company will search high and low to find the right mortgage for your credit score and budget.

Are you ready to begin the process of buying a home now that your credit has improved? At Cornerstone Residential Mortgage, we may be able to help you. We work with you to find the perfect mortgage to meet your needs.