Almost There: Little Credit Score Tweaks to Get the Score You Need for a Mortgage

July 30, 2015 by Leave a comment

Different mortgage types require different credit scores—and whether you’re just a few points shy of the 580 needed for an FHA loan or the 620 a traditional Fannie Mae mortgage requires, those few points really matter.

If 5-10 credit score points are keeping you from getting the home of your dreams, then following these speedy fixes will help.

Ask for a Credit Increase

Want to boost your credit score in about 10 minutes? Call one of your existing credit cards and ask for a line of credit increase. If you are a good customer and always pay on time, most will grant an increase immediately. Increasing the amount of credit you have available adds to your score, but applying for a new card or loan could harm your score because the creditor will pull your report.

Every time your report has an inquiry, it has the potential to lower your score by a few points, according to online scoring experts at Credit Karma. Simply adding to an existing credit line, but not using the credit granted, improves both your utilization and available credit, increasing your overall score without the risk of an added inquiry.

Make a (Big) Payment

The amount of credit you are actually using matters when your score is calculated. The closer you are to the maximum line of credit on any of your credit cards, the lower your score will be.

If you are using more than 50 percent of any line of credit, paying that loan or card down to 0 percent can help. If you have the cash and can make the investment, you’ll be rewarded with a swift boost in your credit score. Continue to work on your utilization and your scores will naturally climb, but for those last few points, the quick fix is a lump sum payment to a creditor.

Check for Errors

Run your own report one more time and check for any possible errors. Check everything for accuracy, from the accounts in good standing to any erroneous late payment reports or collections. Mistakes do happen, so spotting an error and having it removed can provide a boost to your score. Check your good accounts as well as any the credit reporting agency lists as negative; if an inaccurate “late” slips by on even a single month in the past year, that account could be harming your credit, even if it is generally positive.

Getting those last few points is nerve-wracking but it can be done. Any one of the above techniques could give you all of the points you need – trying all three methods will likely put you past your “magic number” and on your way to your new home.

Thomas began his mortgage career in San Francisco, California in 2003 after serving in the United States Army, and has over 10 years of experience in the mortgage industry. Contact Thomas by phone at 203-707-5728, or by email at [email protected] NMLS # 202157.


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