First-Time Homebuyer? Here are 5 Tips to Improve Your Credit Score

Buying your first home for sale in Aspen is a big deal – and if you’re like many people, you’d like to improve your credit score a bit before you apply for a mortgage loan. After all, the higher your credit score is, the more likely lenders are to offer you more competitive interest rates and better loan terms. Check out these five tips to improve your credit score before you start talking to lenders.

Your credit score is important when you want a lender to approve you for a mortgage loan, and you may be able to improve it by following these steps:

Request a copy of your credit report
Dispute any errors you find
Increase your credit limits
Pay down larger debts
Ask for a “rapid rescore”

Here’s a closer look at each.

Credit Improvement Step #1: Request a copy of your credit report

Thanks to the Federal Trade Commission, we’re all entitled to a free copy of our own credit reports (from each of the major credit bureaus) each year. You can get yours at AnnualCreditReport.com, or you can download an app such as CreditKarma to monitor your credit score and reports.

Credit Improvement Step #2: Dispute any errors you find

If you find errors on your credit report, dispute them as soon as possible with the agency reporting them. You can learn how to dispute errors on each bureau’s website. Be sure to include as much information as you can.
Additionally, contact the original debtor that reported the error and ask it to update its records with the bureau reporting the mistake.
Related: 3 mortgage myths it’s now safe to ignore

Credit Improvement Step #3: Increase your credit limits

Ask your credit card companies to increase your credit limits. When your credit limits are increased, your debt-to-income ratio goes down, which many lenders use as a metric to determine your creditworthiness. Just be careful: A lot of credit card companies will check your credit before increasing your limits, which can put a temporary dent in your score.

Credit Improvement Step #4: Pay down larger debts

If you have a lot of debt on one account, pay that down as much as you can. The farther away your balance is from your credit limit, the better. If all your debts are around the same size, pay off those with higher interest first; that way, you’re putting extra money in your pocket.

Credit Improvement Step #5: Ask for a “rapid rescore”

You may be able to get a “rapid rescore,” which can improve your credit significantly within a matter of days. You should try this option with each credit reporting bureau after you’ve taken steps to clean up your credit report. The higher your credit score is, the better off you’ll be when lenders are making decisions about how much – if any – money to lend you to buy a home in Aspen.
Related: What is a contingent offer?

Are You Selling or Buying a Home in Aspen?

If you’re ready to sell your home in Aspen, Woody Creek, Basalt, Carbondale or Snowmass, we may be able to help you.
Get in touch with us right now to find out how much your home is worth – and discover how we’ll be able to help you sell it quickly and for top dollar.
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