9 TIPS TO IMPROVE YOUR CREDIT SCORE & SECURE A MORTGATGE.

One of the greatest contributing factors to having a mortgage application approved is your credit score. A high credit score will not only strengthen a mortgage application, it will also work in your favour when negotiating an interest rate. Conversely, a low credit score may wind up costing you a higher interest rate and possibly having your mortgage application not being approved.

1] Find out what your credit score is:
This is a good starting point. Knowing what your credit score is before contacting potential mortgage lenders is important. You can contact Equifax and other web sites who have apps which are compatible with most smart phones, to find information about your credit history and credit score.

2] Clean up any delinquent accounts/charges on your credit report:
Accounts showing missed payments will result in a lower credit score so be vigilant in making regular payments to creditors, even if you can only afford to make the minimum payment amounts due. And know that paying past due amounts owed and bringing these accounts into a ‘Current Status’ will increase your credit score in a relatively short period of time.

3] Dispute errors that appear on your credit report:
It isn’t uncommon to discover an error on a credit report. In some cases a negotiated settlement for an old debt may not be reflected and in other cases a payment you may have made for some reason did not show up. With the Internet and technology the process to submit a dispute or complaint you might have regarding your credit score is an easy one.

4] Identity Theft is real so check your reports carefully and dispute any unauthorized charges.
Surprisingly it is not uncommon for a credit report to show accounts/charges on it that you had never authorized. In the age of the Internet identity theft is a very real danger we face so be diligent in reading over all the charges shown on your report.

5] Pay off creditor accounts that have low balances owing:
Banks (lenders) calculate income to debt ratios so if your credit report shows a number of outstanding debts, even if they are current, it would be a good idea to pay off the balances. This income to debt ratio can become a big factor particularly when applying for a pre-approved mortgage. Your mortgage lender will be able to give you professional advice as to which accounts you may want to pay off.

6] Pay bills when due:
An important tip for improving your credit score is to pay bills on the due date. Paying bills on time may seem like a silly tip for improving a credit score because it’s so obvious, but it needs to be discussed. Payment history goes a long way towards achieving a good credit score.

7] Do not close old accounts:
As credit history is a key determining factor in your credit score result, closing an old account that is current (nothing owing) does more harm than good. The reason is an old account in a current status shows a history of that account and it reflects positively in your favour. So don’t be in a hurry to cut up that old credit card… just put it in a safe place.

8] Avoid opening too many new accounts:
Opening too many new accounts can often result in your credit score being lowered. The reason is when a new account is opened, in most cases a credit inquiry is pulled and too many credit inquiries can negatively impact a credit score.

9] Speak with a professional to help you improve your credit score:
Fortunately there are professionals to help you improve your credit score. The internet is a good resource tool to find such organizations and business’s in your area.