Improving Your Credit as a New Home Buyer by Bentsen Palm

June 6th, 2016

Learn How to Improve Your Home Buyer Credit with These 7 Tips from Bentsen Palm

You’ve found the perfect Rio Grande Valley real estate at Bentsen Palm and you’re ready to buy a new home.  Now is a great time to take a look at improving your credit before you meet with lenders to find out how much you’ll be able to spend with McAllen home builders.

Getting the best home loan possible that meets your needs and your budget will make the home buying process easier for you and should save you money.  We’ve shared a list of seven tips to help you improve your credit score as you prepare to buy a new Bentsen Palm home.

1.Know Your Credit Score

You are entitled to a free annual copy of your credit report from the major credit-reporting bureaus, Equifax, Experian, and TransUnion.  All three versions of your credit report are available at www.annualcreditreport.com.

Credit scores range from 300 to 850, and the higher, the better. Scores are based on the debt you’ve incurred and whether you’ve paid on time in the past. You’ll need a score of at least 620 to qualify for a home loan and 740 to get the best interest rates and terms.

2.Fix Any Errors on Your Credit Report

Review your credit reports.  If you find mistakes, write to the reporting credit agency to correct the error.  You’ll need to provide supporting documentation. Also, send a letter to the debt collector that reported the incorrect information and dispute the error.  Request to be copied on any communication with the credit reporting agency.

3.Eliminate Credit Card Debt

Paying your credit card bills in full every month is a great way to help improve your score.  If you cannot pay in full each month, pay as much over the minimum as you can to reduce your balances.  It’s also best not to use all the credit you have on hand.  You can often can increase your scores by limiting your charges to 30 percent or less of a card’s limit.

4.Pay All Bills On Time

Even a few late payments can impact your credit score.  Always pay your bills on time and save yourself money by not having to pay late fees.  Credit card companies may not report late payments of less than 30 days, but a good rule of thumb is to set up automatic payments or reminders if you can so you don’t have to remember it’s time to pay the bill.

5.Do Not Erase Good Debt History

While it may seem like a good idea to remove debt history, it’s actually quite the opposite.  Part of your credit score is based on the length of your debt history, for example, how long you’ve had a credit card and whether you’ve managed it responsibly or if you’ve had a car loan and made timely payments each month to pay it off.

6. Avoid Applying for Multiple Cards or Buying Big Items

You don’t want to start applying for additional credit right now or purchasing any big ticket items like new furniture or a car as mortgage lenders may pull credit reports one last time before closing on your home to make sure your financial situation hasn’t changed.

7.Give It Time

Credit scores won’t change overnight, but if you put these best practices in place now, you will see a change.  And most importantly, be patient and diligent. The more you improve your payment record over time, the greater the positive impact on your credit scores.

Looking for new homes in Mission, TX? Schedule a tour of Bentsen Palm and discover the most unique South Texas master-planned community in the Rio Grande Valley.