How to Improve a Credit Score for Mortgages
One of the primary pieces a mortgage lender uses to make a lending decision is your credit score. Borrowers with bad credit may be denied by a lender altogether or may pay higher interest rates than borrowers that have good credit scores. There are steps you can take to improve your credit score for mortgages---preparing you for buying or refinancing your home.
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Instructions
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1
Pull your credit reports. Order a copy of your credit report from each of the three credit agencies (equifax.com, experian.com, transunion.com). You can request a copy of your credit report by phone, fax or online.
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2
Review each credit report. When you receive each credit report, review the report line-by-line and mark any inaccurate items or negative credit items, such as late payments, non-payments, discharges or write-offs. Do this for each credit report because information can differ from agency to agency.
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3
Dispute negative and inaccurate items. Dispute any negative and inaccurate items that appear on your credit report according to the dispute process provided by each agency. Provide a complete explanation as to why these items should be removed from your credit report.
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4
Make your payments on time---always. The No. 1 item used in the calculation of your credit score is that you make your payments on time. So, pay your bills on or before the due date and after a few months, you'll see your credit score increase.
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5
Make arrangements with creditors. Contact creditors and collection agencies that you have negative accounts with to negotiate mutually beneficial payment or debt arrangements. When you negotiate a deal to take care of your bad debt, get the agreement in writing and make sure you stick to your end of the deal---making the new payments and making them on time.
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6
Monitor your credit. Pull your credit reports at least once a year to repeat Steps 2 through 5 while you continue to work on improving your credit score.
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