5 Ways to Improve Your Credit BEFORE Buying a House

If you plan to buy a home near Eldon, MO, credit score is an important factor. When you buy, you are likely going to seek a loan for the purchase of your home. A mortgage lender will need a number of documents to approve your loan, including your credit score information. If you want to help better set yourself up for homeownership at the Lake of the Ozarks, it's time to make improvements to your current credit situation. Take a look below to learn how you can start making improvements now!


1. Keep Credit Card Balances Low

Lower credit card balances help to lower your score. This proves that you can keep your loans paid off and don't let them get out of control. If you have high balances on your cards right now, try to make larger payments to get this number back down to a safe level. You don't want to max out a credit card - it may seem like you can't handle credit and may not pay back your loans, therefore lowing your credit score.

2. Make Payments On Time

Timely payments are an important part of your credit score. Make efforts to pay ALL of your bills on time - especially your credit-related bills. Late payments can lower your credit score, therefore making it more difficult to land a loan.

3. Avoid Major Purchases

Major purchases that affect your credit should be avoided when buying a home. A new line of credit via a car loan or new credit card can have a negative impact on your credit score in the short term. A new purchase can temporarily lower your score before it goes back up. Try to keep your credit activity at a minimum when getting ready to make a big purchase - like a home.

4. Try to Have Mixed Credit Lines

A variety of credit lines can show that you are well-rounded when it comes to your credit. A generic credit card, a store credit card, a car loan, and home loan are all different credit avenues. It's best to have a good mix of credit lines to help improve your score.

5. Dispute Credit Errors

It's important to keep an eye on your credit. After you check your credit report, you may notice an off-charge or something that does not belong. You can dispute any error on your credit report. This can help to clear negative factors from keeping your credit score down.

Now that you are armed with this knowledge, you are ready to start making efforts to improve your credit score. Your loan interest rate may also be based on your credit score, along with other factors. Improving your score can help to set you up for a successful mortgage approval and help you gain the lowest interest rate possible. If you are ready to start your home search, contact our team of real estate agents in Eldon, MO. We want to help you find the perfect home for you and your family!


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