Interest rates have remained near all-time lows through the end of 2020 and now the beginning of 2021, so we expect many individuals to enter the home buying market for the first time this year. Even if you’ve selected the perfect realtor and have a hefty down payment saved up, it may be challenging to secure a mortgage without meeting some credit score requirements first. With that in mind, let's jump into some tips to help you boost your credit score this year!
Your existing credit card debt makes up 30% of your total credit score. Thus, if you are carrying around a large sum of debt, attempting to pay it off quickly can give your credit score a quick positive jolt. With tax refunds on the horizon, it may be worth allocating some of that money to any outstanding debt you are trying to shed.
If you don’t have the means to pay off your debt at the moment, you could consider directly contacting your creditors to see if anything can be done to help your situation. There is a possibility that creditors will be open to mark the debt as paid in full in exchange for a lump-sum payment from you. If you make any agreements to have your debts reduced, be absolutely sure to get them in writing to help yourself out down the road.
Maintaining a high credit score can be difficult when you are just getting your start at life after school. Suppose you have a trusted family member who already has an established credit history. In that case, you should consider asking if they would allow you to become an authorized user on their account. As long as they do not have a history of making late payments, you will be able to strengthen your own credit score by using their card without the risk of acquiring more debt if you budget wisely.
Clearview Realty helps home buyers in Colorado, Florida and California understand the different types of mortgages available and provide loans to help people achieve the dream of homeownership. Since the specifics of which mortgage to choose is dependent on a variety of factors, we encourage you to call us for more information and find out which is right for you. Our number is (720) 217-5731, or you can send us a message.