Your credit score is one of the most important things that will help determine the kind of mortgage, rates and terms that you will get. It may, therefore, be wise to improve your credit score before submitting a mortgage application. How can you improve your credit score in order to get a lower mortgage interest rate?
As previously reported here on Realty Today, improving your credit score is one of the ways to get a lower mortgage interest rate along with finding the best loan and locking in your interest rate before closing. While several tips and tricks were given to improve your credit score, let us take a closer look at more ways for you to get a better credit just in time for your mortgage application.
One of the things you can do to improve your credit is to pay your debts and bills on time. Realtor.com reports that some mortgage lender avail of a credit score service, which allows them to set a target score and the algorithm will find and list ways on how you can improve your credit and reach the set value.
The publication also notes that one of the reasons that people often have low credits is because of high credit utilization. This means that most people have higher debts than their total available credit. One, therefore, should avoid overusing their credit cards.
Another tip to raise the credit prior to a mortgage application is by resolving disputes. You can negotiate with creditors or may also file a formal dispute with the credit bureaus.
The publication also advises on putting more money down in order for you to be placed in a different mortgage category. While giving a higher down payment may seem like a hard thing to accomplish, doing certain things such as bringing your own food to work instead of dining out can help you save more than what you initially expected.
