So, you’re thinking about buying a Basking Ridge home. Currently, Wells Fargo shows the interest rate for a 30-year fixed-rate mortgage at 4.25% (as of 2/21/19). That’s an awesome rate. But that’s limited to buyers with great credit. If your credit score leaves something to be desired, you might pay more. It works in your favor to boost your score as much as possible before you apply for a mortgage loan. How do you do that? Settle in and be patient. This is not instant gratification. It takes some time. That’s why you need to start this as
How to Improve Your Credit Score
Request Copies of Your Credit Reports
First, you need to know what’s on your credit report. Back in late 2012, the FTC studied consumers and credit reporting agencies. They found that 20% of people found errors on their credit reports and disputed them. That translates to one in every five people. Erroneous information could negatively affect your credit score. So, it’s imperative that you get these errors removed to improve your chances of a better score. Visit AnnualCreditReport.com to request a free copy of your credit report from each of the three reporting agencies: Experian, TransUnion, and Equifax.
Removing Erroneous Information
Once you receive your reports, look each of them over to make sure everything on it is correct. If you find an error, you need to contact the agency and provide proof of their mistake. I’ve provided links to each agency’s dispute page in the previous paragraph. Simply click on the name of the agency above. Then, contact the company that reported the erroneous information, explain the error to them, and ask them to contact the agency to remove it. This might help speed up the process.
Late payments happen from time to time. They also might get reported on your credit. If this is a one-time thing, contact the company reporting the late payment. Ask them if it is possible to remove this from the reporting
Ask for a Credit Limit Increase
We all understand that paying off your debt works wonders for your credit score. But, another way to boost your score without paying anything out of pocket right now is to request a credit limit increase. Your debt-to-credit ratio factors heavily into determining your credit score. Lenders like to see you using no more than 30% of your available credit. So, a $1000 limit on a $1500 card is bad (using 67% of your available credit). But, if you increase that to a $5000 limit, you’ll only be using 20% of your available credit. Contact your credit card company and request a credit limit increase wherever possible. Then, pay down the balance for an even better debt-to-credit ratio.
All of this takes time. The sooner you start the process, the better…especially if you want to get a great interest rate on the loan you need to buy your next Basking Ridge home. Better credit scores mean better interest rates. Good luck. And when your score is in the best shape it can be, contact us to start looking for a new home.
FEATURED BASKING RIDGE HOME FOR SALE
To learn more about this and other Basking Ridge homes for sale and rent, please visit our Featured Listings page here.