How can you improve your credit score?
It's challenging to change your score in the time between when most people decide to buy a home or refinance their mortgage and when they apply. So the short answer is, you really can't "on the spot." But there are strategies you can live with to make sure when you apply for a loan your score is as high as possible.
Make sure that the information each of the three credit reporting bureaus has on you is consistent and up to date. Order a copy of your credit report about once a year, and dispute any inaccuracies.
Theoretically, if a series of credit reports is requested on your behalf during a limited period of time, your score may go lower, until time passes without any inquiries. Changes in Federal law mean that "consumer-originating" credit report requests do not impact scores much. Also, credit inquiries for a mortgage or auto loan are not treated the same as applying for multiple credit cards in a limited period of time. Credit repository scoring models recognize that people request their own credit reports to keep up with what's on them, and that consumers may shop for mortgages and car loans.
Unsolicited credit card solicitations in the mail don't count against your credit report, so don't worry. The two main components of your credit score are your payment history and the amounts you owe. Bankruptcy filings and foreclosures, which can stay on your credit report for as many as 10 years, can significantly lower your score. It's never a good idea to take on more credit than manageable.
Late payments work against you. It's extremely important to pay bills on time, even if it's only the monthly payment. Don't "max out" your credit lines. Since the size of the balance on your open accounts is a scoring factor, lower balances are better.
It's said that by carefully managing your credit, it's possible to add as much as 50 points per year to your score. Check with your Loan Officer to learn more about tools that are available for immediate credit score relief. Tools like Credit Expert can reveal what changes in your credit might immediately improve your score. Our Loan Officers are proud to offer this service to you via our credit vendors.
