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There are three ways to raise credit score fast when you want to buy a home from mortgage bankers:

  • January 13, 2020
  • by D Bianco

1. Reduce your credit card balances.
2. Have friends or family with great credit add you to their accounts with unused credit balances as an authorized user. This will increase your unused credit balance.
3. Erase credit report errors with a rapid re-scorer.

Higher FICO scores equal better mortgage rates

You're excited to purchase a home. But you're worried about getting a home mortgage loan with a preferred mortgage interest rate. You fear that your credit score is less than perfect. And you want to know how to best raise your credit score fast.

It's a fact that having a higher credit score will lead to better loan offers from mortgage banks. While it can take months to overcome some derogatory events and negative items like missed payments, and years to build an excellent track record and high FICO score, but with a few tricks you can raise your score quickly.

Learn the facts. Being proactive early may result in you getting the affordable loan and home you want.

Understanding credit scores

Your credit score, also called a FICO score, is a three-digit credit rating value ranging from 300 to 850. This number indicates how likely you are to repay your debt and meet your financial obligations. This score is based on info in your credit report that comes from the three major credit bureaus: Experian, Transunion, and Equifax.

Any score above 670 is considered very well. Anything at or below 599 is considered weak. Even if your score is below 600 you can still qualify for a mortgage. A higher down payment may be required.

A higher score gets you access to better home mortgage rates.

What determines your credit score?

Five factors make up your FICO score calculation:

• Payment history (35 percent of your score)
• Utilization (30 percent of your score). Your utilization is the amount of credit used divided by the amount of available credit. The lower this % is, the better
• Length of credit history (15 percent of your score). A longer credit history will raise your FICO score
• Mix of credit (10 percent) Installment accounts like car loans are better than revolving accounts like credit cards or store credit cards.
• New credit (10 percent) Opening too many credit accounts over a short period can lower your FICO score

How to increase credit score immediately

How to improve credit score fast, try these proven tips:

Check your credit report regularly from all three credit-reporting agencies. Request a free copy at any of the credit bureaus. Correct any errors that are lowering your score. Immediately alert all three credit reporting bureaus about any potential errors you may notice. It's important to immediately notify and dispute all claims made against you that are false on your credit reports.

If your errors are corrected quickly, ask your loan officer at Cliffco Mortgage about a rapid re-score service. Your Cliffco Mortgage lender or another lender can get this for you because rapid re-scorers don't deal directly with consumers.

Reduce your debt. The most effective way to improve your FICO credit score is to pay down your revolving credit card debt.

Long-term tips for raising your credit score

Make on-time payments. Setting up automatic payments through your lender or financial institution helps you make your payments on time.

If your problem is that you have a limited credit reporting history, here's how to build credit quickly, boost your credit score by having family members or friends with great credit add you to their accounts as an authorized user. This works best for accounts that have low utilization. You don't actually use the account. But its good payment history records will appear on your credit report.

Other steps you can take

Don't max out all of your credit cards! Responsible borrowing can help build your credit. But charging near or more than your credit limit max will hurt your FICO score.

Improve your debt-to-income (DTI) ratio. Get your DTI ratio by summing your monthly expenses and dividing it by your gross monthly income.

You should avoid closing a credit card or financial accounts before applying for a loan. The longer the account info remains on your credit report, the better it is for your credit score.

If all you need is error correction, you can see your FICO increase in a matter of days (but there is no guarantee that correcting errors will make your score goes up). Paying down significant amounts of debt — such as dropping your utilization from 80 percent to 20 percent — can also pop your score up rapidly.

But if your credit report is littered with late payments, collection accounts or other serious problems, it can take up to 12 months to raise your score. You must first demonstrate a consistent payment history

-by D Bianco