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Improve Your FICO Score To Secure A Better Mortgage

Sammamish Mortgage
Published:
September 11, 2014
Last updated:
February 26, 2021
Improve Your FICO Score To Secure A Better Mortgage
In This Article

Summary: Is your credit score holding you back from getting the best rate on your next mortgage? The good news is that there are actions that you can take to increase your credit score and improve the interest rate offered on your next home loan. This article will explain more.

If your credit score is suffering and is getting in the way of you securing a mortgage, there are things you can do to improve the situation. Here are a few easy and effective tips to help you get your credit score to where you want it to be.

Increase The Amount Of Credit Available To You

The easiest way to increase your credit score is to increase your credit limit, as this reduces your utilization ratio. To do this, you can or ask a current credit card provider to increase your credit limit. Those who have a stable income and have made their monthly payments on time should have no problem getting an increase of their credit limit.

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Pay Down The Balances On Your Credit Card

Paying down your credit card balances can help you increase your credit score, as a large portion of your score is determined by the percent of available credit that you are using. Ideally, you want each card balance to be under 30 percent of the total limit while also keeping your total credit usage to less than 30 percent of available credit.

A utilization ratio under 30 percent tells lenders that you can manage credit responsibly. Do not maintain a high balance on one card and a low balance on another card.

Keeping every credit balance below the 30% threshold is ideal. Even if you pay off your credit card balances monthly you can be negatively impacted as the utilization ratio is calculated based on your statement date, not your balance after your payment is made.

Settle Past Due Debts

Roughly one-third of your credit score is determined by your ability to make payments in a timely manner. If you have any payments that are 30 or more days past due, you may wish to settle those debts or make arrangements to pay them.

Creditors who allow you to roll past due payments back into your loan may update your credit report to say that you are current on your payments. This could have a huge impact on your credit score and help you qualify for a better rate on a home loan.

Increasing your credit score is one of the best ways to get the best rate on a mortgage. This may enable you to gain additional leverage when negotiating for a better rate that may lower your monthly payment to a more affordable level.

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Have Questions About Mortgages?

Are you ready to apply for a home loans? Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as Oregon, Idaho, and Colorado. We have a variety of mortgage programs to choose from, and have been helping borrowers since 1992 . Please contact us if you have mortgage-related questions.

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