If you’ve had some trouble getting a mortgage, it usually helps to improve your credit report and raise your FICO score. So here are 3 tips to improve your credit report and work toward approval for a mortgage.
#1 Pay Off Your Credit Cards and Lines of Credit
The easiest way to improve your credit score and prove that you can afford a mortgage is to eliminate other forms of debt from your monthly budget. If you have outstanding credit card, student loan or other debts, get them paid off as quickly as possible. But don’t close the credit card and lines of credit, so the history remains on your credit report.
You’ll also want to avoid taking on any new loans while you’re trying to get your mortgage approved, since these are likely to show up on your credit report and can hurt your chances at approval.
Learn about your debt-to-income ratio.
#2 Pull Your Credit Report and Correct Errors
You may discover that there are errors or inaccuracies that can be cleared off with a quick phone call, such as a past loan that was fully paid or a missed car payment that was reported in error. Every credit report error that you can fix will bring you one step closer to your mortgage approval, so spend a few minutes combing through your report.
#3 Pay All Your Bills on Time
Being late on a payment, or missing a payment completely, can leave a negative mark on your credit report. So it’s very important to keep your bills paid to avoid being reported as a late or overdue payment.