5 Quick Tips to Boost Your Credit Score and Achieve Your Financial Goals
Your credit score plays an important role in your financial health, especially when it comes to major milestones like buying a home.
If you want to see quick improvements in your FICO credit scores, follow these proven strategies to give your credit a quick boost!
1. Pay Down Your Credit Card Balances
High credit card balances can negatively impact your credit utilization ratio, which accounts for about 30% of your credit score.
Aim to bring your balances to under 20-30% of your credit limit, and even lower if possible. The lower your balances get, the higher your score will go. This is one of the most effective ways to improve your credit score quickly.
2. Check for Errors and Dispute Them
Mistakes on your credit report can drag your score down unnecessarily. Visit AnnualCreditReport.com to access your free credit report and dispute any inaccuracies with the credit bureaus.
AnnualCreditReport.com will not provide you with your FICO credit scores, however, it’s a great resource to take advantage so that you can see what is on your credit report.
3. Make All Payments On-Time
Payment history makes up approximately 35% of your credit score. Unfortunately, missing a single payment can hurt your score significantly.
Ensure you’re paying on-time by setting up auto-pay or using calendar reminders. Even if you’re just making the minimum payment, it’s important to pay on-time.
4. Don’t Open New Credit Accounts
While it might be tempting to apply for new credit, each application may generate a hard credit inquiry, which can slightly lower your score.
Don’t open any new accounts, unless specifically instructed to do so by your Loan Originator. Instead, focus on maintaining your existing accounts during this period.
5. Request a Credit Limit Increase
Contact your credit card issuer to see if you’re eligible for a credit limit increase! This will have the effect of lowering your credit utilization ratio without paying down your balance.
However, you need to be cautious. This strategy only works if you don’t increase your spending! Remember, as you decrease the percentage of credit that you’re using (balance ÷ credit limit), the higher your score will go.
Improving your credit score doesn’t happen overnight, but small, consistent changes can make a significant difference in just a few months. Better credit can lead to lower interest rates and more favorable loan terms.
If you’re planning to buy a home, contact us to discuss how your credit score impacts your mortgage options. We’re happy to provide personalized advice on the exact steps you need to take to improve your score. We’re here to help you achieve your dreams of homeownership!
Ready to start your homebuying journey? We’re here to help!
Schedule your Homebuyer Consultation today and find out exactly what you need to do to get preapproved.
