In a prior blog post, we talked about credit facts every Columbus home buyer should know. Now we’re going to give you credit score improvement tips that can help improve your chances of qualifying for a mortgage.

Please be advised that because FICO is very tight-lipped about exactly how credit scores are tabulated, there are no magic bullets here. However, we have basic insights to share from The Federal Trade Commission, FICO, and our own industry experience.

1. Pay your bills on time, including cell phones and utilities. You don’t know who is reporting to the credit bureaus until you pull your credit history.

2. Reducing your debt load helps boost your score, but spreading debt around does not. Avoid frequent balance transfers to take advantage of temporary breaks in interest rates. This strategy can cause you to open more lines of credit than necessary, and in the long run, it could be detrimental.

3. Don’t max out your credit limits. Using more than half of your available credit balance can depress your credit score. Some counselors suggest that you should not use more than one-third of your credit line.

4. The age of your credit accounts can impact your score. The more seasoned your accounts are, the better.

5. Applying for too much credit can hurt your score. If you are shopping for interest rates, making multiple, like-kind inquiries in a very short time is not considered harmful. However, multiple inquires on your credit report can cause a higher perception of risk. Tread carefully.

6. The number of credit accounts, and the type of credit, also can impact your score. A mix of credit, such as a credit card and a car loan, show that you can handle various debt types with equal responsibility. Some types of accounts are considered negative, however. Loans with consumer finance companies, and payday loan companies, are not generally helpful to your score.

7. Do not close credit accounts, unless it’s necessary to prevent fraud or theft. It’s okay to pay off a debt, but if you don’t wish to use a certain credit card anymore, cut up the card and leave the account status in good standing. The bureaus and scoring models do not always make a distinction between an account closed by the consumer, vs. an account closed by the creditor. The latter situation is considered negative.

We are always happy to share information that helps you achieve home ownership! If you are ready to pre-qualify for your mortgage, we can refer you to reputable lenders in Columbus who can help you with home financing!

When you are buying a home in Columbus, having us on your side as your Exclusive Buyer’s Broker will give you distinct advantages! Please remember that unless otherwise disclosed,  real estate agents and brokers all work for the seller! Having your own Exclusive Buyer’s Broker on your side is the best way to ensure you do not overpay for a home, or get into a contractual situation that is not right for you.

Contact us and learn more about home buying strategies in Central Ohio! Also, download our free e-book for immediate tips that you can put to use today.

Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax

www.BuyersHome.com
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