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5 Ways To Improve Your Credit for A Home Mortgage

By Sari R. Updated on 6/8/2015

Is your credit score less-than-ideal? If this is the case, you have some work to do before you can buy a home. Your credit score determines how much you will pay in terms of your interest as well as whether or not you will even be able to qualify for a loan. If you need to fix your credit for a home loan, here are a few ways you can do that:

Pay Credit Card Debt.

If possible, pay down your credit card debt as soon as you can. This will not only show the lender that you are serious about repaying your debts, but also that you have the financial ability to do so. Even if you can only apply a small payment each month, you will still start the process of improving your credit score. 

Review Your Credit Report.

Every year, the credit agencies compile a credit report that details the specifics of your credit score. It's possible that a mistake was made that is affecting your credit score. To eliminate this possibility, you should do a thorough review of your credit report every year. If you do see any errors, you will need to submit a dispute in writing detailing why that error was wrong as well as any supporting evidence you have to back up that claim.

Don't Consolidate Debt.

When you have a lot of credit card debt, it can be tempting to consolidate all of it. This is not a good idea for several reasons. First of all, when you consolidate your debt, you will need to apply for a new credit card, which can further harm your FICO score. In addition, consolidating all of the debt can make it seem much more overwhelming financially than if you were to pay off each debt one by one.

Start Making Regular Payments.

One way to improve your credit score is to start using your credit to make regular payments toward monthly bills. Do this only if you can responsibly pay off your bills on time. If you can accomplish this, you will show your lender that you have taken paying off your bills seriously.

Have an Open Line of Communication With Your Lender.

As always, communicating with your lender is a good thing. If you have a few blemishes on your credit report or your credit score is lower than you'd like due to extenuating circumstances, make sure to tell him or her. The more you communicate with your lender, the more he or she will be likely to understand and cut you a little bit of slack.

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About The Author:
Sari R.
Sari R. is a mortgage editor for Lender411com. She graduated with a Bachelor's Degree in Screenwriting and Public Relations/Advertising from Chapman University. She can be reached at sarelyn@lender411com.

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