When purchasing a home, there are several factors that must be considered before you sign on the dotted line. Your credit score is significant in the home-buying process because it tells lenders if you are a risk. Unfortunately, you can’t just improve your credit score overnight. It is an on-going process. Let’s look at several things you can do now that will help you improve your credit score and purchase your dream home in Markham.
1. Request Your Credit Report
Before you apply for a mortgage, you should always request your credit report. This report shows your financial history and the transactions and decisions that affect your credit score. Go through this report with a fine-tooth comb and fight for any discrepancies. If there are mistakes, file a claim and remove them. This one task can help you see a fast improvement in your score.
2. Pay Off Your Debt
One of the best things you can do to improve your credit score is to pay off your debt. Your available credit lines account for 30% to 35% of your credit score. If you have large balances on credit cards, focus on these first as they typically carry large interest rates.
3. Pay Your Bills on Time
Lenders want to know that you can pay for your bills on time. By staying on top of your bills and paying on time, you will see your credit score gradually improve. If you are currently late on several bills, make those the top priority in your financial plans. If you struggle to pay bills on time, opt for automatic bill pay or talk to your providers and ask for a different due date.
4. Make Wise Decisions
If you want to purchase a house soon, be mindful of your current financial decisions. Avoid making any large purchases — particularly those that require a credit check such as a new vehicle. Also, avoid opening any new credit accounts such as store credit cards. These credit inquiries can ding your credit and lower the score you are working so hard to build.
Overall, the most important thing you can do to improve your credit score is to develop strong financial habits and keep yourself financially healthy. Once you are ready to purchase your dream Markham home, contact local real estate agent Martin MacFarlane to help you find the right house in the perfect neighborhood.