For some homebuyers, becoming creditworthy can be quite a challenge. Creditworthiness is one of the many factors that lenders will look into whenever you apply for a mortgage.
After all, it’s one way of showing lenders that a borrower can carry out the financial responsibility of having a one. If you’re thinking about buying a home and applying for a mortgage, you need to prove that you are financially ready and able to do so.
First, you need to work on how to increase your credit score. This is especially true if you currently have a bad credit. While it doesn’t happen overnight, there are definitely ways to turn your credit score from bad to good.
Responsible spending matters
Your spending habits matter most when you’re currently preparing to apply for a mortgage. You can also save more if you just spend on the things you need.
You need to use your card in careful moderation in order to help increase your credit score. If you can, try to pay for the things you need in cash rather than swiping your card.
Let your credit cards have some rest
One of the biggest factors that hurt your credit is when you accumulate more debt. As mentioned, you can increase your credit score by decreasing your credit card use.
Keep in mind that you can have better credit ratings if you keep your balances low. As much as possible, try not to use more than 30 percent of your credit limit. It always pays to be a smart spender especially when your preparing to apply for a mortgage.Have some questions? Our lenders can help.
Pay your dues responsibly
Lenders will want to see their borrowers being responsible when it comes to paying their dues. Your credit score will thank you if you keep a good habit of paying your existing debts in full and on time.
If you can, consider paying more than what you’re due. This could also reflect well if you’re aiming to increase your credit score faster.
Apply for a credit limit increase
If possible, you can try and ask your creditors if it’s possible for you to get a boost in your credit limit. The higher your limit gets, the better chance you can increase your credit score.
This strategy only works if you keep your spending habits low. It’s too easy to get tempted to use your credit card more if you have a higher limit. However, if you’re working on becoming creditworthy, it’s definitely not the way to go.
Dispute credit report errors
Errors can still happen when you get your current credit report. Therefore, you have to be extra mindful of these possibilities. The good news is, you can definitely dispute any errors you might see in your report especially when it hurts your score.Our lenders are ready to help you.
Becoming creditworthy does not happen overnight
There are still a lot of borrowers who need to work on becoming worthy of a mortgage approval. Once you’re ready and creditworthy enough to apply for one, you will become one more step closer to become a homeowner.
Increasing your credit score in order to boost your chances of mortgage approval requires patience and hard work. Most of all, it doesn’t happen in a flash. When you do, it’s all going to be worth it.