You’re definitely not alone when it comes to wanting to improve your credit score. About 1/3 of Americans have some form of credit delinquencies according to a 2014 study by the Urban Institute. But there is a light at the end of the tunnel for potential home buyers. For many, the gap to qualify for home financing isn’t that far. With some basic credit management tips, you can get there.
- Starting now, make all payments on time, even if it’s just a minimum payment.
- Check your credit report to see if there are any errors. It’s surprising how often a corrected error can close the gap to qualifying.
- Avoid applying for new credit cards or lines of credit.
- Pay a greater amount on the higher interest rate credit cards.
What you need to know about your credit report
You don’t have to watch TV very long to catch one of the credit report commercials flooding the airwaves lately, usually by one of the major credit bureaus. The challenge is lenders look at what is called a tri-merge report when determining your credit, using all three bureau reports, not just one.
A tri-merge report combines all three credit bureau reports together to determine your qualifying credit score. A good starting point is to request a report from all three bureaus.
Although the reports are not combined, you’ll have a more accurate picture of your credit standing. This allows you to address any discrepancies and start the process of removing negative items.
Contributing Author: Evan Jansen
Evan Jansen is a mortgage industry veteran with 14 years of experience. Evan has helped over 800 individuals finance their dream of owning a home. Have a question for Evan? Leave us a message on our contact page. Licensed in Colorado, California, Washington, Texas, and Florida. We are a local branch of a National Lender located in Denver, Colorado. Who is Summit Mortgage? Learn about what Summit Mortgage has to offer.