Boost Your Credit Score Before a Home Loan Application

The options included in your mortgage and the interest rate you are offered greatly depend on your credit score. If your score is lower than you would like, this article can help.

The previous article from Advanced Title Company focused on preparing to meet with your mortgage lender. The first tip in this article was about clearing up your credit record and ensuring your credit score was an accurate one.

Tips to Help Improve Your Credit Score

In addition to this being important to actually obtain a home loan, the weight of your credit score can actually determine the interest rate you are offered and any additional home loan benefits and options. To help you improve your credit score and get you a better home loan, below are some tips to consider.

Interacting with Credit

As strange as it may sound, there are many people who have a good amount of savings in their regular account and pay their bills on time using cash, however they don’t necessarily have a good credit score. The reason for this is because credit agencies have little information to use when calculating a credit score. If this sounds like you, taking out a small credit card can be a potential way to improve your credit score. The key is to use it in the correct manner and not get into debt. As an example, using a credit card solely to pay your bills and then immediately transferring the funds into your credit account before the statement issues can be a great way to demonstrate that you are able to manage a line of credit and show a history of credit card bills being cleared each month.

Direct Debits

This tip can work in conjunction with the above, or without the use of a credit card. Each time that a bill is paid late, whether you incur a fee or not, it is recorded on your credit file and influences your credit score. Even if you have the money in your account and simply forget to pay, making the payment the next day can still work against you. Direct debits can solve this problem by debiting your account when each bill is due without any action required by yourself. With direct debits in place, you can start to build up a history of on-time payments and positively influence your credit score. When it comes time to find your dream home, be sure to perform due diligence, including obtaining title insurance in Grand Junction, CO. To find out more about how title insurance in Grand Junction, CO can protect your home ownership, speak with Advanced Title Company at (970) 255-7677 before settlement.

Gather Your Debts

If you have a range of cards which are maxed out and you simply pay the minimum amount each month, then you are not doing anything to reduce your overall outstanding debt and you aren’t helping your credit score. If this sounds like your situation, consider a debt consolidation loan. A loan works differently than a credit card for a number of reasons:

• Your liabilities are reduced to just one lender
• Unlike a store or credit card, a loan has a specific repayment schedule, with your debt reducing each payment you make. This is much better for lenders to see than a revolving line of credit.
• The fewer payments you have to make each month makes it less likely that you will miss a payment and negatively affect your credit score.

No More Debt

The worst thing that you can do before applying for a home loan is to take on more debt. This can make lenders nervous and reduce your credit score. This is often a challenge for those who are regularly offered store cards with promotions including bonus loyalty points. However, if you come across a line of credit which truly can benefit you, be sure that you close an old line of credit as soon as the new card arrives. This can help you to take advantage of a credit line which may benefit you without growing your liabilities.

The Best Investment in Your Home Is Title Insurance in Grand Junction, CO

Once your credit score is in a good range and you are about to apply for a home loan and search for your dream property, it’s important that you complete your due diligence. Title insurance isn’t a good-to-have, it’s a must-have. Title insurance in Grand Junction, CO provides financial protect against claims made towards the ownership of your home and its title. To find out more about the benefits of title insurance in Grand Junction, CO, speak with an expert on the subject at Advanced Title Company by calling (970) 255-7677 before you sign your settlement paperwork.