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3 Ways To Boost Your Credit Before Buying A Home

Performance Property Real Estate Question

Q: My partner and I have decided to buy a home. What can we do to get the lowest mortgage interest rate when we buy? Maria, Wallington, NJ

A: Most people, especially 1st time home buyers assume that when they apply for a mortgage loan that they’ll get the prevailing mortgage interest rate they see on the internet. The truth is that your personal credit score plays a huge role in the mortgage interest rate you’ll be offered by a lender when you buy a home and luckily your credit score is something you have enormous control over. Here are 3 ways to boost your credit score before you shop for a mortgage loan:

1. Reduce your credit card balances. Your credit utilization ratio is the amount owed on your credit cards as a % of your overall available credit. Generally, if your goal is to qualify for the lowest mortgage interest rate, you should get your credit utilization ratio below 30% of your available credit.

2. Check your credit report with all 3 major credit bureaus to make sure there are no mistakes especially regarding late payments and closed accounts.

3. Pay your bills on time and set up automatic payments on all your bills and credit accounts so you can’t accidentally forget to make a payment. Late or missed payments lower your credit score and can stay on your credit report for 7 years.

Thanks for your question, Maria–good luck!

For more real estate tips and information visit my blog at geraldlucas.com.