With home buying season well on its way, it's important to see how your credit is doing before applying for a mortgage. If when credit monitoring, you find you have a low credit score, this might affect your ability to apply for your mortgage.
Landlords take your credit score into consideration before allowing you to rent. An ideal renter would have an above average credit score, and a satisfactory rent-to-income ratio. This number between 301 and 850 lets landlords know you can be trusted to pay your rent on time.
For these reasons and more, it’s vital you monitor your credit score, and boost it as much as possible. Here are some easy steps to take to boost your credit before applying for a mortgage.
1. Make Your Payments On Time
While an obvious first step, making your payments on time is the most efficient way to improve your score.
Set reminders for each bill’s due date, because nothing will impact your credit score as much as getting your bills paid on time. If you have multiple existing credit cards open, you can use this to your advantage. Make small purchase on your multiple accounts that you can easily pay off to build a solid credit history.
2. Stay Below Your Monthly Credit Limit
Keep around 25% beneath your credit limit by buying less on your credit card. This is a simple solution that should work for many banks. For most banks, the higher your credit score, then the higher your credit limit is. Continue to make regular purchases to build your credit, but do so well within your limit.
3. Find Mistakes In Your Credit Report
Before applying for a mortgage, review your credit report and look for erroneous material error on your credit file. CNBC reported in 2017 that over one in five customers have "Potentially Material Error" in their credit file, making them look riskier than they really are. This demonstrates how your poor credit score may not be your fault.
Equifax Inc. (NYSE: EFX) is one service for getting credit reports instantly. Look through the payments that have been marked as delinquent, and determine their validity. If you find a single error, contact your banking service immediately. The faster you report the mistake, the faster your credit score will rise.
4. Start Banking Digitally With MoneyLion
If you need to apply for a mortgage, you’re looking to improve your credit score simultaneously, then try using MoneyLion for your online banking. All users, even those with low credit-scores, can receive a low-interest 5.99% APR loan. These loans are accessible at any time as a Plus member, with no need to reapply. Regardless of your credit score, your loan will be deposited in minutes. This has been proven by MoneyLion to raise members' credit.
MoneyLion is a content partner of Benzinga.
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