Planning to Buy a New Home? Do All You Can to Improve Your Credit
If you’re considering buying a new home in the not-too-distant future, now would be a great time to start doing all you can to improve your financial picture. This article will discuss a few things you can do to improve your credit score, which is crucial if you are applying for a home loan.
Get a Current Copy of Your Credit Report
The first thing you need to do is find out exactly where you stand. Ask one of the major credit reporting agencies for a current copy of your credit report. You are entitled to request a free copy every year per The Fair Credit Reporting Act. So, if you haven’t requested a copy in the last 12 months, now is the time. The Federal Trade Commission recommends going online to AnnualCreditReport.com to make your request.
NOTE: We do not recommend that you search “free credit report” via Google or another search engine. There are a lot of scammers out there who have set up fake websites in an effort to obtain people’s personal financial information for questionable purposes. Stay safe and use the website listed above.
Clear Up Any Outstanding Issues
Once you have your credit report, go through every item one at a time. Every account listed on your report, both current and outstanding, should be familiar to you. Any balances should accurately reflect what you owe. When you find a mistake it’s important that you flag it, along with any old debts that have long since been paid off. If you find something that shouldn’t be there, phone the reporting agency and give them details. If you need to challenge the item, they will help you with this.
Get Your High-Interest Debts Paid Down
Finally, organize your outstanding debts, giving priority to those with the highest interest rates. It is essential that you always make your minimum payments on time to avoid higher fees or having those bills go to a collection agency. Then, you want to do all you can to pay off those high-interest debts first. The faster you pay those off, the less you’ll spend on interest and the more you’ll have to pay off other debts. In the meantime, you’ll watch as your credit score improves.