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How to Improve Your Credit Score to Get Approved for a Home Mortgage Loan

Magic tricks are spectacular to watch as you are challenged to discover the mystery of the illusion. The big reveal is filled with wonder and amazement. Here's a big reveal, when it comes to building your credit, there's no magic involved, no secret formula, and no special shortcut to success. Your credit score is one of the most important factors lenders will use to consider in approving your application for a home mortgage loan. Maintaining a strong credit rating can help improve your likelihood of qualifying for a lower interest rate loan, which can save thousands of dollars over the life of your mortgage. If saving money is of any interest to you, then keep reading because I have found a few resources to know before you go to apply for a home mortgage loan. Check with your bank to find out if a copy of your credit report is available for you to review from this trusted financial institution. Another trustworthy option is getting your credit report from one of the national credit reporting agencies, rather than comprise the security of your personal information with risky credit repair offers. I
f you notice that your credit score is lower than anticipated, no worries, there are a number of ways to improve your credit rating. Here are a few important tips on how you can improve your credit score to get approved for a home mortgage loan.

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How to Improve Your Credit Score to Get Approved for a Home Mortgage Loan

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If you're ready to improve your credit score, whether working on your own or with a credit counselor it's essential that you create a budget, develop a debt repayment plan, and review and dispute errors on your credit report. Here are a few other resourceful tips to help improve your credit score-

Authorized User

Consider being added an authorized user on a family member's credit card with a satisfactory payment history. Even if you do not personally use the credit card, it helps build your credit history and improve your score. Keep in mind that if the account is ever late, delinquent or in poor standing, these factors will negatively affect your credit rating.

Timely Payments

One of the most important actions you can take to improve your credit score is to keep current with payments. Late payments can potentially remain on your credit report for as long as seven years and can have significant negative impact on your score. 

Low Credit Utilization Ratio

Another tip is to make more than the minimum payment on credit cards whenever possible to help reduce credit utilization ratio and pay off debt. The amount of credit you are using compared to the total amount of credit available to you factors into your credit utilization ratio. Maintaining a lower credit utilization ratio shows potential lenders that you're a responsible borrower and not financially overextended.

Review Credit Accounts 

Think in terms of longevity. The longer period of time you establish your satisfactory credit history, the better this will reflect on your credit history. When considering closing old accounts, be aware that this may shorten your credit history and lower your score. Also avoid opening any new credit accounts during any lender credit reviews. Each application for new credit can result in a hard inquiry placed on your credit report which can temporarily lower your credit score.

Dispute Credit Report Errors

Mistake happen. Never assume the information reported on your credit report is completely accurate. Request a free copy of your credit report from each of the three major credit bureaus once each year. Review your reports carefully and dispute any errors you find.

Improving your credit score takes time and effort. Getting approved for a home mortgage is a major life event, and a good credit score can make the process much easier. By following the tips above, you can improve your credit score and increase your chances of getting approved for a mortgage.

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