4 Simple Steps to Increase Your Credit Score
You already know what credit score you need in order to qualify for a mortgage. That’s not what we are here to talk about. Let’s set aside your credit score for a minute and talk about what steps you need to take in order to get the best interest rate for the loan. Your credit score determines your monthly payments. You might have been told that even with a low credit score, you can afford a home for sale in Atlanta, Sandy Springs. It’s true!
A low credit score will get you a loan, albeit after much struggling, but the problem that you will encounter here are the high monthly payments. Since you have a low credit score, the lender sets a high interest rate because of your unstable payment history. Consider the slight increase as a form of insurance because the lender needs to protect himself too.
Now that you are all caught up on how the credit score works, let’s have a look at the four steps that will help you boost your credit score:
1. Check Your Credit Report
The top three credit reporting agencies in the US are TransUnion, Equifax, and Experian. Every year, you are entitled to a free credit report from these agencies. However, if you are getting the report twice in a year, all three together will cost you around $40. The reason why you need to get the current credit report before applying for a loan for a home for sale in Atlanta, Sandy Springs is to make sure that there are no false charges on it. This mistake is the reason why your credit score is low and you need to report it immediately to the concerned department. Once you are done with this, you can proceed to the next step.
2. Pay Accounts That Are Overdue
One of the worst things about overdue balance is that it keeps adding negative points to your credit score. The key is to get your account current, so that you can speed up the positive score. A negative score tells the lender that you are a reckless spender with no plans in sight on how to keep up with the payments.
3. Use Less Credit
Let’s assume that you have a credit limit of $3,000, Carrying a balance of $2,000 will not do you any good. As you know, you need to keep your income and your monthly utility bills in mind before approaching a lender for a loan, the same way you need to create a balance between your balance and credit. Try keeping your credit card spending to less than 50% of your account balance. Another thing you can do is to get your credit increased, but make sure to curb your spending or you will be back to square one.
4. Avoid Closing Any Accounts
If you are in debt and there’s a high balance on one of your credit cards, then don’t close them. This will leave the negative score as it is. Why not keep this account for small auto pay payments such as Netflix, your gym membership, and other charges.
Follow these steps, and you will be able to improve your credit score within six months. Remember: the higher the credit score, the lower the interest rate and the faster you will be able to make the monthly payments. Need to get a home for sale in Atlanta, Sandy Springs appraised? Head on over to America’s Network Realty Group Inc. and get a quick appraisal from our experts.