A Columbus OH Mortgage Company Shares Tips for Improving Your Credit Score

It’s a brand-new year and a brand-new decade. You may have decided to take a brand-new approach with your finances, particularly if you’re been thinking about financing a home. Liberty Capital Services LLC, a Columbus OH mortgage company, shares a helpful guide to think about with regards to your credit score and purchasing homes.

What Mortgage Lenders Look For

One of the most important factors in getting mortgage financing in Ohio is your credit score. And it’s not an insignificant one. Your credit score will have a direct impact on which loan programs you can qualify for and even the interest rate that you can get.

When it comes right down to it, your credit score is one of the single most important things that determine what you can get qualified for. And if your credit score is less than stellar, now is the time to start cleaning it up.

Credit Score Realities

Your credit score can range from 300 to 850 with anything over 810 considered exceptional. Although your credit score is only one factor when a lender is looking at your creditworthiness, the higher you can get your score, the more successful you are going to be when applying for a mortgage in Ohio.

Pay Your Bills on Time

Paying your bills on time is the most important thing you can do when it comes to your credit score. Having late payments on your report can have a significant effect on your score. If you see any late payments on your credit report and feel that it is an error, you should contact the credit bureaus to set a dispute in motion and have it corrected.

Dispute Errors

According to the Federal Trade Commission, approximately 5 percent of consumers experience errors on their credit reports. Reviewing your credit periodically is one way to ensure that errors don’t go undetected.

When you do see an error, you will want to send a letter to the credit bureau with a detailed explanation of what errors you have found. The credit bureau will then review your case and respond, usually in about 30 days from your original correspondence. If they find that an error has been made, it will be removed from your credit report.

Keep Your Utilization in Check

Your credit limit vs. how much credit you use is called your utilization ratio. Your credit score dips when your utilization exceeds 30 percent.

There are two ways to deal with this. One is to pay off your balances to get you to under a 30 percent utilization. Another is to call your credit card company and ask for higher limits on your cards. But keeping your credit card purchases down as much as possible is a good way to move forward.

Don’t Open New Accounts

Any time you open a new credit account, it will show as a hard inquiry on your credit report. Lenders don’t like to see that a potential borrower has been opening new accounts before applying for a mortgage. A good rule of thumb is to refrain from opening new credit accounts and avoiding hard inquiries for 6 to 12 months prior to applying for a mortgage.

Don’t Close Any Inactive Accounts

It may seem counterintuitive, but old accounts that are unused help strengthen your credit score and show your length of credit history. If you still want to close out an account, wait until after you apply for a mortgage.

Get Professional Advice

Before you go shopping for a mortgage, make sure that you have set yourself up for success. Get the assistance of an Ohio mortgage broker to prequalify you so you’re not wasting your time.

At Liberty Capital Services, we have been trusted mortgage professionals in Columbus and throughout the state of Ohio with decades of combined experience. Call us today at (614) 505-0620 to find how we can help you get the mortgage financing you need.

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