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5 Ways to Boost Your Credit Score Before Buying a Home

Remember the days when you wished you paid more attention to your grade point average in high school when it came time to apply to colleges? Well, post-graduation, you may experience the same anxiety about your credit score if you haven’t taken steps to optimize it prior to applying for a mortgage loan. The good news? It is relatively easy to improve your score if you take some simple steps.

Here’s some more good news: Montchanin Builders has partnered with one of the most highly-respected mortgage lenders in the country, Supreme Lending, to provide custom financing for our amazing collection of new construction homes and award-winning communities in Delaware. Regardless of what your credit score is, we invite you to contact Montchanin Builders to learn about our special financing options, which let you take advantage of some of the industry’s lowest rates and closing costs.

Why Worry About Your Credit?

“A good credit score makes life more affordable,” says Bruce McClary, vice president of communications for the National Foundation for Credit Counseling. “Even when you don’t need a good score in the moment, you should be doing things to help you build toward the best credit you can have.”

The mortgage professionals Montchanin Builders has partnered with know a good credit score goes beyond the ability to get a housing loan at the best terms — it can also save you substantial dollars on necessities like utilities or a cell phone plan. If you are considering one of the new homes in Delaware, read on for sage advice.

How Your Credit Score Works

Your credit score is determined using several types of data, including your payment history, how much credit you have and length of credit history.

Here are five steps the pros suggest to help improve your score and get back on the bright side of borrowing.

  1. Know thyself.

Many people don’t realize you can check your credit report for free once a year from each of the three main credit reporting agencies, TransUnion, Equifax and Experian. However, your score won’t be included on these free reports — you’ll usually have to pay a fee to see it.

Third-party websites like 3freescores.com and creditkarma.com can provide a simulated score at no cost. While it’s not exactly the same number that lenders see, it should give you a pretty good idea of where you stand.

  1. Pay. Your. Bills. NOW.

Your payment history is the single biggest factor in determining your credit score. Lenders are reluctant to give money to someone who has a history of missed payments.

Paying a bill more than 30 days late can drag down your score. “One single missed payment can drop your score anywhere from 100 to 300 points,” said McClary.

If you experienced a time where money was tight and you were late with some payments, here’s your opportunity to turn things around. Set a strict budget and start a habit of paying your bills on time. If you had extenuating circumstances, such as a medical illness and bills have gone to collections, take the opportunity to reach out to the bureaus to explain the situation.

It may not help – but it can’t hurt.

  1. Take charge of your debt.

Keeping your balances low will help raise your credit score. The goal? Keep your debt utilization (the amount of available credit you actually use) as low as possible.

A good rule of thumb is to never let the balance be more than 30% of the credit limit — of any one card or in total. If you are carrying a balance on any revolving accounts, make a plan to get them paid off as soon as possible.

  1. No credit? Get some.

While it’s not necessary to have a vault of credit cards, having one or two that you use responsibly will boost your score.

If you don’t have a credit card, we recommend opening an account and making a small purchase each month and paying it off. One option for the credit-challenged are “secured cards,” in which you pay a deposit up front which you then charge against to build a history.

  1. Patience is a virtue.

Remember: good credit scores don’t just appear magically – they take work. What’s more, the positive effects of your efforts could take a few months to show in your score.

Custom Financing For New Construction Homes in Wilmington, DE

We are proud to partner with Supreme Lending. Ranked #33 in the Top 100 Mortgage Companies in America, Supreme Lending is known for its time-honored philosophy of “building customers for life.” Their “old school” way of doing business is testament to why the majority of Supreme’s clients come from referrals from satisfied customers and real estate professionals who know a Supreme Lending sale is as good as done.

We invite you to go on a tour of our move-in ready homes in Wilmington, DE and meet with our mortgage lender to see how you can make your dream a reality.

More Resources:

  1. Time, “7 Ways to Improve Your Credit,” http://time.com/money/collection-post/2791082/7-ways-to-improve-your-credit/
  2. Washington Post, “How to Improve Your Credit Score,” https://www.washingtonpost.com/news/get-there/wp/2018/06/07/how-to-improve-your-credit-score/