Fixing your credit to buy a home is a crucial step in the home-buying process. A higher credit score can help you qualify for better mortgage rates and terms, ultimately saving you money in the long run. Here are some things I did to improve my credit and enhance my chances to get the best rate.
Reduce Credit Card Balances: Aim to keep your credit card balances LOW. A high credit utilization ratio (the amount of credit you're using compared to your total credit limit) can negatively impact your credit score. 30% isn't low enough, go lower!
Do not open new account!: Every time you apply for credit, it results in a hard inquiry, which can slightly lower your credit score. Avoid opening unnecessary new credit accounts while you're trying to repair your credit and purchase a home.
Pay any collection items: Address any outstanding debts or accounts in collections. Negotiate with creditors or collection agencies to set up payment plans or settle for a lower amount if possible.
I followed these steps to secure my home! The process was very tedious but worth it. Not everyone wants to own a home, however if you do: Fix your Credit!