Having a good credit score is key in qualifying for a mortgage. If your credit score is low, knowing how long it takes to raise it will help you plan. There is no magic pill with raising your credit score. It takes time, especially depending on what is dragging your score down. Typically, you need at least a 660 credit score to qualify for a mortgage. Here are a few things you can do to boost your score.

1. Correct errors on your credit report. You may request a free copy of your credit report once per year. If you see any errors on your report, you may refute that error with the bureau by providing documentation proving otherwise. For instance, if you paid a card payment on time but you’re dinged as late, find the confirmation e-mail showing you paid on time and send it to the bureau. It normally takes about 30 days for resolution and you may have to provide additional information.

2. If you don’t have any credit, open up a small credit card and use it every month. Don’t overspend, use it on things you were already going to buy anyways, and then pay it off in full each month. This will help you build credit worthiness to potential lenders. 

3. Handle your delinquent accounts. If you have accounts in collections, you can boost your score pretty quickly by settling those accounts. The late payment history will remain on your account for 7 years so if the accounts are almost at the 7 year mark, it may not make financial sense to settle them.

4. Lower your credit utilization ratio. This ratio is how much you owe compared to how much available credit you have. The credit utilization ratio represents 30% of the credit score so if you have a high ratio and you’re able to pay some of your debt down quickly, you could see a significant score increase.

5. When inquiring about your credit score, ask the creditors if they are doing a “hard” pull or a “soft” pull. A hard pull will affect your credit history while a soft pull is used for background purposes only and will not affect your credit history.

It’s all about consistency when increasing your credit score. Doing small steps over time will lead to big results. If you’re concerned about your credit score, consult with a mortgage professional for guidance. For a list of my preferred partners, e-mail me at amandaromeo@kw.com.

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