Three Ways to Improve Your Credit Rating

Before you decide to apply for a mortgage and get that house you want, you need to make sure your credit rating is as good as it can possibly be. The better your credit rating is, the lower your interest rate will be. This will help bring down your monthly payment, and save on interest cost over the period of the mortgage.
credit rating
Remove mistakes from your credit report
Of course, the first thing you need to do is get a copy of your credit report. There are three different credit agencies, so you need a copy from each of them. If there are mistakes on your report, you should contact the lender that reported the bad mark and have them remove it. Every bad mark on your report will hurt your credit score, so anything you can do in this area will be helpful. However, even a bad mark that is legitimate, if it is several years old, the lender may remove it for you, and this will help as well.

Pay down some of your debt
One of the factors in determining your credit score is the percentage of debt to credit available. You do not want to have your credit cards carry debt that is close to the limits. Pay down some of this debt, so you will have a healthy amount of credit available. Having accounts open without any balance can be helpful as well. In addition, this helps you get approved for a loan, as lenders look at an applicant’s income to debt ratio to determine if they can comfortably make payments on a mortgage.

Don’t close accounts or consolidate your accounts
Sometimes knowing what not to do is as important as knowing what is best. In this case, you need to avoid consolidating your bills into one account, especially credit cards. It is better to have several accounts than one or two, and these balances paid down. Your credit score will not increase when you pay off several accounts, and consolidate your debts into one account. Pay off your accounts one by one, and keep them open.

Even a slight difference in interest can mean a large savings over the course of a 30-year mortgage. Therefore, it pays to take the time and get your credit report looking as good as it can be. The above tips should help you accomplish this. Once you are ready, you can get a quote from a mortgage lender tampa company.