If you are one of thousands of potential homebuyers looking to take the first step toward the closing table, one of the best places to start is evaluating and optimizing your credit score.
Request a Fresh Report Copy
Ordering an updated copy of your credit report from one of the major agencies places helpful insights at your fingertips. The Fair Credit Reporting Act allows you to access a free copy of your credit report once every 12 months. You can access this free service online through AnnualCreditReport.com, a website recommended by the Federal Trade Commission. Most banks and credit unions will also provide this information at low or no cost to clients.
It’s not recommended to use a search engine to search for “free credit report” or similar search terms. There are many impostor websites looking to obtain your personal financial information for dishonest and criminal purposes.
Clean Up Anything Outstanding
Take time to review your report line-by-line and verify each current and outstanding account in the report. Any balances owing should be in order and reflect how much you owe. It’s critical to flag any mistakes or old debts that you have already paid in full. If you come across anything that shouldn’t be on your credit report, call the reporting agency to let them know. If necessary, they will assist you with challenging the issue.
Pay Down Those High-Interest Debts
Prioritize your outstanding debt so that you can pay them off more efficiently. The essential debt payments are your mandatory minimums, which are paid to avoid being sent to a collection agency. Another best practice is to address balances with the highest interest rates first. Getting these paid off faster means that over time, less money is spent on interest. Moreover, you can use that extra cash to pay down additional debt.
When you’re ready to discuss a mortgage for your new home, give our team a call. We will be happy to advise you on the mortgage offer that suits your needs, budget, and credit.