Your credit score is one of the biggest factors lenders look at when determining your mortgage eligibility and interest rate. If you want to get the best mortgage rates in Farmington Hills, it’s crucial to have a strong credit score. Here are some tips to improve your credit score before applying for a mortgage loan.
Check Your Credit Report
The first step is getting a copy of your credit report from all three bureaus – Equifax, Experian, and TransUnion. Ensure all the information is accurate and that there are no errors that could drag down your score. Dispute any inaccurate information by contacting the credit bureaus.
Pay Down Debts
Lenders like to see that you can manage your debts responsibly. Try to pay down credit card balances and other revolving debts. Getting balances below 30% of the limit can boost your score. Avoid maxing out cards and make more than the minimum payment each month.
Don’t Open New Credit
It can be tempting to open new credit cards to increase your available credit, but this tactic can hurt your score if done right before a mortgage application. Wait to open new accounts.
Lower Your Credit Utilization Ratio
This ratio compares how much credit you use versus your available credit. Using more than 30% of your available credit can reduce your score. Consider asking for a credit line increase and avoiding unnecessary purchases before your mortgage application.
Monitor Your Credit
Check your credit by requesting free annual credit reports from www.annualcreditreport.com. You can also access credit monitoring services to monitor suspicious activity and identity theft.
By building their credit, Farmington Hills residents can improve their chances of obtaining mortgage approval and getting the keys to their dream homes. Consult a loan officer in Farmington Hills for guidance on improving your credit score before applying. You can unlock the best mortgage rates and terms with a strong score.
