5 Tricks To Quickly Raise Your Score

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If you’re going to buy a house in the near future you’re going to want to have the highest possible credit score. The better your score is the lower interest rate you’ll get on your mortgage. Just a half a percentage difference could mean tens of thousands of dollars in savings throughout the course of your 30 year loan.

Imagine if you could raise your score quickly before applying for your home loan? Believe it or not it is possible to give your score a quick boost. Here are the 5 tricks you need to do before applying for a home loan.

1. Fix Mistakes

Get your credit report and look for errors. You can get your credit report for free once per year at annualcreditreport.com. There is a US law that gives you this right – so use it. It is useful to see your report because it will show you if you’ve been the victim of identity theft or if there are errors in your report.

If you find any errors on your report contact the three major credit bureaus to get them fixed. Just one error, such as a debt that’s listed as owed but has been paid, can give your score a quick boost.

2. Credit Utilization Rate

If you are using up a large percentage, say 75%, of your credit – your score will suffer. The ideal percentage of your credit limit to use is 30%. To raise your score, use 30% or less of the credit limit on each of your cards. So if you have one card in which you’re using 75% of the limit and another card where you’re using 0% of the limit, charge any new purchases on the empty card and pay down the balance of the other card. If you do this you’ll see your credit score increase.

3. Don’t Cancel Your Credit Cards

You may think that credit cards are bad and that you should cancel them. But if you care about your credit score you should not close any of them – even the ones with yearly fees and a high interest rate. By canceling a credit card, especially your oldest card, you are going to cause your score to take a dip.

One thing that the credit bureaus look at is how long you’ve had credit. The longer the better so canceling your oldest card will make it appear like you haven’t been using credit that long.

4. Get Rid Of Your Debt

The more debt you have the worse off it’s going to be for your hopes of getting a good interest rate. But not all debts are created equal. If you still owe a car or student loans, paying them off will surely help your score. However paying off your credit card debt will give you an even bigger boost to your credit score. So concentrate on eradicating your credit card debt first.

5.  Watch Those Credit Checks

Whenever a company checks your credit your score will take a dip. When multiple companies are checking your credit it is an indication that you are desperate for money. It’s a sign that you need money and are going place to place attempting to get it. This desperation is hurtful to your score.

But what if you just want to go loan shopping? There’s nothing wrong with that. So in order to minimize the damage done by these checks, do them in a short time frame so it will appear that you are simply looking for the best deal. Another way to minimize the damage is to get a recent copy of your report and show this to creditors. That way they won’t have to get the report themselves and trigger another credit check.

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