Ways to Improve Your Credit Score to Qualify for a Mortgage - Trinity Homes

Ways to Improve Your Credit Score to Qualify for a Mortgage

Credit scores play a crucial role in qualifying for a home mortgage. The five elements that go into your credit score are payment history (35 percent); amounts owed (30 percent); length of credit history (10 percent); credit mix in use (10 percent); and new credit (10 percent). Here are a few tips on how to improve that all-important score.  

  1. First, get a copy of your credit report. You are entitled to a free report from each of the three credit bureaus (Equifax, Experian and TransUnion) every 12 months by going to AnnualCreditReport.com. Sending for one bureau every four months is a way to monitor your credit for free.


  1. Follow the tips provided by the credit bureaus on your credit reports. In addition to providing your scores, the report may offer various ways you can improve your credit score. The notes can provide helpful hints such as “balances too high” or “too many inquiries.”


  1. Get rid of those little hangers-on – those annoying small balances on various cards. Select one or two cards as your “go-to” cards. Pay the bills on time and pay them down.


  1. Always, always pay your bills on time. Payment history makes up 35 percent of your credit score. If you have late payments, rebuilding your credit history can take some time. Pay special attention to paying utility and doctor bills on time.


  1. In comparison to your total available credit, keep your credit card balances low. To maximize the value of the credit card to your record, the credit card balance should not exceed 30 percent of the card’s available balance. This factor comprises 30 percent of your of your overall credit score. If you have trouble in this area, consider asking the credit card company to raise your credit limit to improve the debt to credit ratio.


  1. Time heals all wounds. Negative items on your credit report generally disappear in seven years.


  1. Open new accounts only when absolutely necessary.


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