Stuck while buying a house? Know how to improve credit score

Credit scores brimming with energy are ideal when it comes to buying a house or getting a home loan. Credit scores below 650 are unhappy scores and the score holder needs to take strategic steps on how to improve credit score. The rewards these scores fetch are not as good as rewards fetched by 700+ scores.

But if you are one of those who often shuttle between bad and mediocre credit scores and seeking a home loan, there’s good news for you. You can still get a loan and have your dream home.

Working on how to improve your credit scores can be a daunting task, but we are here to hold your hand and guide you through some basic steps that will tell you how to improve credit score before applying for a home loan. 

Let’s check out options to strengthen and solidify your scores.

1. Check your credit report: This is the first step to improve the scores and you need to be in full control of your report. It is important to know what is bringing it down; where exactly you stand and what needs to be done. This way, you can work on the problem areas and avoid major errors from happening.
2. Fix the errors: Most people whose home loan applications have been rejected for they have had errors or inaccurate information in their credit reports. Check out yours. Once you spot the error file, claim with your credit bureau and wait for a response which should come within 30-60 days. 
3. Get out of debt fast: About 30% of your score is calculated on how much you owe. Find out your debts, decide which ones you need to pay first and stop taking fresh debt to pay off your old debts. That is a bad idea.
4. Automate payments: Once you automate your finances, you won’t have to worry about manually paying bills each month or forgetting a payment. You automatically start investing. Ideally, you could also improve your score by paying at least the minimum amount and if possible a little more every month.
5. Lower credit utilisation: This is the second biggest factor in determining your credit score. It contributes 30% of your score and reflects how financially responsible you are. The amount of available credit you are using is called credit utilisation ratio.

Tip: Do not close any accounts within six months of filing the loan application. You need as much credit as possible when you apply for home loans.  

If your credit is not as strong as you would like, work on building it. If you are still fretting on how to improve credit score stay with us for more.

Join us on https://creditsscore.in/how-to-check-credit-score.