Credit Improvement Tips

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  • Having good credit is important, but advice is often confusing and contradictory. We'll discuss credit improvement steps specifically for mortgages.

    Our Best Tips for Credit Improvement

    Buying a house with bad credit is not really possible anymore.  These steps are designed specifically to get your credit in the best condition to qualify for a mortgage.

    • Make sure the info on your credit report is accurate.  Up to 25% of credit reports have errors serious enough to result in being turned down for a loan!
    • Dispute errors with the credit bureau that reports it. (Transunion, Experion, or Equifax)
    • Make all of your debt payments on time, early is even better.

    Adding your name to a relative’s credit account may improve your score.

    • Limit the number of times anyone “pulls” your credit report.
    • Pay off any collections, liens, or judgements against you.
    • Keep your credit account balances under 30% or at least under 50%.  This shows that you can be responsible and not max out all your credit cards.

    Most things stay on your credit report for 7 years, but foreclosures and bankruptcies can last up to 10 years.

    • Keep accounts you’ve had for a long time, even if they have  zero balance.  The longer you have an account, the more it will help.
    • Use a variety of credit types.  Having only credit cards or only car loans does not show use of diverse types of credit.  It’s good to show a variety of types over time, for example: a car loan, a credit card, store accounts, and a line of credit with your bank.

    Let’s be very clear, we are not suggesting you go out and get lots of new debt to improve your credit.  Also, don’t make any changes to your credit before discussing them with your Mortgage Professional.  What seems smart may not be!

    Your credit score can range from 350 to 850.  A 700 or better is considered to be good credit.

    Thinking of buying a home in the Portland, Oregon area? Checkout our First Time Home Buying Classes!

    Credit Improvement Tips was last modified: May 1st, 2018 by David Axness

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