5 Tips to Getting a Better Credit Score for A Better Mortgage

Looking to get a higher mortgage pre-approval for that house you’ve had your eyes on? It's likely a higher credit score can help. Try one of the following tips to help get you there:

1. Using less than 30% of your available credit each month and ideally less than 10% is best. Paying off your bills fully every month while fully using your credit is less effective. Raising your credit limit could help keep your percentage of utilization down.
2. Keeping a balance on your cards doesn’t help and could set back your financial goals, which are better served by consistently paying off credit-card debt in full.
3. Shopping around for a mortgage getting multiple credit scores can hurt your credit, but when credit scoring companies see different lenders pulling your credit score around the same time, they bundle multiple requests as a single query. So shop different rates at the exact same time, within 14 days or less.
4. 21% of consumers studied in 2012 found errors that resulted in modifications by the credit-reporting firms. Not all credit reports are accurate. So check your credit by regularly looking at your credit report. You are entitled to a free copy of your credit report annually from each of the credit-reporting companies (TransUnion, Experian, and Equifax). You can request them at AnnualCreditReport.com or by calling 1-877-322-8228.
5. Every time you open a new credit card - or take out a loan or qualify for a mortgage - the overall average of our credit takes a hit, and the hard inquiry subtracts more points from your credit score.

Buyers should start the home search process knowing what they are pre-approved for. This simple yet important step is often overlooked until buyers find the home they want and then scramble to pull their finances together. Knowing limits before touring homes will help narrow the search and set expectations of what they can and cannot afford.

This post is an advertorial piece contributed by a Patch Community Partner, a local sponsor. The views expressed in this post are the author's own.

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