Getting Ready to Buy a Home? Use These Tips to Boost Your Credit Score
The Lighter Side of Real Estate • August 14, 2022
Your credit score plays a major part in your ability to secure a mortgage—and to secure a competitive interest rate on your loan. So, before you buy a house, you’ll want to do everything you can to get your credit score as high as possible.
So how, exactly, do you do that?
A recent article from realtor.com outlined strategies potential buyers can use to boost their credit score before they purchase a home, including:
- Increase your credit limits. If you can’t pay off your credit card debt, one trick to boost your score is to ask your credit card company to increase your credit limit. Increasing your credit limit will improve your debt-to-credit ratio (how much you owe relative to how much credit you have available)—which plays a huge role in how lenders evaluate your creditworthiness for a mortgage.
- Try to erase one-time mistakes. If you have a history of paying your bills on time, but have one or two late payments on your credit report, try reaching out to your credit card company and asking them to remove the late payment from your credit report. While this won’t work for people with a history of late payments, if you have a mostly positive track record, they may be willing to work with you.
- Pay on time. If your credit score is less-than-perfect because you have a history of late payments, it’s time to start paying your bills on time. The more consistently you pay on time, the more your credit score will improve—and the easier it will be to get a loan.
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House Hunting Just Got Easier – Here’s Why If you’ve been frustrated by the lack of homes for sale over the past few years, here’s some good news. You have more options, so it may finally be time to kick off your home search again. As Daryl Fairweather, Chief Economist at Redfin, explains: “ Now is the best time to buy in the last two years. Mortgage rates are comparable to what they were two years ago, and prices remain high. However, there is significantly more inventory . . . ” The number of homes for sale has grown compared to last year, and even more options are on the way. While this is typical for the busy spring season, here’s why this is so important right now. Homeowners are listing their houses at the highest pace we’ve seen in a while. New Listings Are on the Rise Over the past few months, the number of new listings, or homes that have recently been put on the market for sale, has been steadily rising (see graph below): Basically, more people are putting their homes on the market each month – whether they’re moving up, downsizing, or relocating. And this trend is a positive sign for the housing market. Sellers who may have been on the fence the past few years are starting to jump back in. That’s helping to boost overall inventory and create better opportunities for both buyers and move-up sellers alike. But it’s not just that the number of fresh options is up month-over-month; there’s also been a jump compared to last year. According to Realtor.com, new listings in March were 10.2% higher than last year, making it the biggest March for new listings since 2021 (see graph below): For anyone who’s been waiting for more choices, this is exactly what you’ve been hoping for – because more homes coming onto the market means more options and a better shot at finding one that fits your needs. To make sure you don't miss out on any of the latest listings for your area, lean on a local real estate agent. Bottom Line If you're thinking about making a move this spring, now may be the time to start exploring your options. With more fresh listings hitting the market, you may find a home you love waiting for you. What features or neighborhoods are at the top of your wish list?
