Credit score on phone

Believe it or not, the 2022 real estate buying season is just around the corner. After a record-setting 2021 for many parts of the country, most experts agree that house prices will continue to rise and competition for homes will be strong.

If you’re one of the many who hope to buy a home this year, we want to do our part to make the process go as smoothly as possible. Now, and in the coming weeks, we’ll be highlighting some ways you can prepare for the 2022 buying season. First up – increasing your credit score.

Accuracy

Regularly checking your credit report for accuracy is one of the simplest ways to ensure that your credit score is the best reflection of your financial habits. There are a number of monitoring services, credit cards, and credit bureaus that allow you to obtain your credit report for free.

Once you have access, review all of your accounts to identify any fraudulent activity. You should also pay close attention to the payment histories for each account to make sure your payments were all recorded correctly.

Utilization

How much of your debt capacity are you using? Credit Utilization can negatively impact your credit score if balances on your credit cards or loans are near their borrowing limits. Applying for additional credit can also lower your score temporarily, so paying down your debt is the best approach to prepare for a mortgage application.

Although you may pay your full balance each month, credit card companies typically report the amount of your monthly statement. Making a payment before your statement closes can minimize the debt shown and boost your score.

Responsibility

Of course, there’s no substitute for paying your bills on time. Mismanaging your fiscal responsibilities is a surefire way to see your credit score take a tumble. And it’s not just credit cards, mortgages, and auto loans that you should worry about. While those are the most likely to appear on your credit report, non-payment of medical bills, utility bills, and bank fees can result in a collection agency reporting the debt to the credit bureaus.

Once this happens, it can remain on your credit report for several years, including long after it’s been repaid. Communication with your creditors is often the best approach if you have difficulty paying a debt. They may have options available that will avoid damaging your credit score.

Download our credit repair guide and find more resources to guide your path to homeownership on our website. Or call to speak with one of our loan professionals today to be sure you’re ready for this year’s buying season.

Share with your friends

Leave a Reply

Your email address will not be published.