5 Tips for Improving Your Credit Report

Your credit history is a key factor in determining whether you’ll be able to get a mortgage, and the rate you’ll pay. Your lender will pull your credit report when you apply for a loan to determine your creditworthiness and review your debt-to-income ratio to see if you are financially responsible. This also helps them to determine what loan amount you can afford and at what rate of interest to approve you at. The better credit history you have, the higher loan amount you'll likely qualify for, and at a lower interest rate. To help you get one step closer to loan approval, MHQ Mortgage Headquarters is offering you 5 tips to improve your credit report.


1. Review Your Credit Report for Accuracy
Since your credit scores are based on the data in your credit reports, it’s incredibly important to make sure that all of that information is accurate. If you have a mistake or discrepancy on your credit report, your credit score will reflect that mistake.

You can request a credit report from each of the three major credit reporting agencies. You’re entitled to a free copy, once a year, of all three of your credit reports under the Fair Credit Reporting Act. You can also set up a free account with CreditKarma.com. This is a great way to review and keep track of your credit history on a regular basis. It also provides tips and suggestions on how you can improve your credit score, making it easier for you to succeed in cleaning up and maintaining your credit.

2. Be Careful with Credit Card Debt
Having a credit card can help to improve your credit score because it helps you to establish credit history. However, one of the biggest negative influences that affect your credit score are credit card balances that consistently exceed 30% or more of the line of credit extended. Typically, it's recommended to allow your credit balances to exceed 30% of the credit limit, and to pay the balance off each month if possible.

3. Take Care of Any Outstanding Collection Accounts
Sometimes things happen that are out of your control. You become ill or injured, and have to make a trip to the doctors office or emergency room. Those unexpected bills can really take a toll on your finances. And when there's more pressing financial responsibilities to worry about, those unexpected bills may get put on the back burner.

While it's understandable that emergencies do happen, and they're not always when you can afford them, its also important to understand that you still have a financial obligation. Letting those types of bills go to collections and not paying them can hurt your credit score. Address any outstanding collection accounts as quickly as possible to help improve your score.

4. Make Your Payments On Time. Every Time.
Delinquent payments can remain on a credit report for up to seven years from the date of the missed or late payment that the credit bureau reported. Since lenders will not only look at your debt-to-income ratio, but also your payment history, this is a really important factor to consider when dealing with your finances. The best way to show creditors that you are reliable and creditworthy is to make on-time payments every time. Even a single late payment can affect your credit history, so be sure every payment is made on time.

5. Build a Strong Credit Age
A good average age of credit history would be five years and up. The longer your positive credit history is, the better the credit scores may be. Building a strong credit history shows lenders that you're capable of making monthly payments. This could mean that you have a revolving account such as a credit card that you use and pay off every month, or you may have a car loan that you make monthly payments toward. These are not necessarily debts that hurt your credit, but can help you establish a strong payment history.

Now that you've got these 5 tips to help you improve your credit history, you can confidently begin working on raising your credit score! If you're in need of a mortgage for a new home, or have any other questions pertaining to mortgage lending, trust in the mortgage professionals at MHQ - Mortgage HeadQuarters to have your best interest in mind. We can help you choose a mortgage program that's right for you and your specific needs!


Mortgage Headquarters of Missouri, Inc
4824 Osage Beach Parkway, Suite 1
Osage Beach, MO 65065

Office: (573) 302-9990
Toll Free: (888)799-1206
Fax: (636)648-9917

NMLS # 1229111




Follow Us On:   Facebook   |   Twitter   |   LinkedIn   |   Google+


Comments

Popular posts from this blog

What You Need to Know About Home Equity Loans

See How MHQ Can Help You with Your Mortgage Needs!