It is no secret that purchasing a new home requires a decent FICO score. Since the housing crash of 2008 mortgage lenders have cracked down on lending requirements making it a bit more difficult to get a mortgage for those with less than perfect qualifications. Your credit score is one of the determining factors that a lender will use in determining what type of loans you qualify for as well as what rate you will be able to get. If you are considering purchasing a home in the next several years you will want to get your credit in tip top shape. Below are a few tips for improving a low FICO score to help ensure you get the best rate possible.
On-time payments: Making payments on-time for all of your credit cards is one of the main determining factors when it comes to your credit score. Making sure you make all of your payments on time is extremely important in improving your score. Make sure you never miss a payment from this point forward.
Negotiate Debt: If you have any unresolved debt you will want to take care of it as soon as possible. A lot of times creditors will allow you to negotiate a lower settlement if you agree to pay in full on the spot. Be ready to make a full payment and haggle your way down as much as possible.
Credit Increase: If you request a credit increase it will lower your overall debt ratio. This can boost your score if you have revolving debt. However, you will not want to do this if you need a loan in the near future, as it will run your credit unnecessarily.
Usage: If you have a few existing credit cards it is beneficial if you use them and then pay them off in full. Continued usage with on-time payments will benefit your credit score on time.
If you need any assistance with your low FICO score we are here to help. We understand how frustrating it can be to feel like your credit score has you trapped.