If you’re thinking about buying a house, it’s a good idea to make sure your credit looks good before you try to apply for financing. When you apply for a mortgage, a potential lender will look closely at your credit reports from all three bureaus to see how well you’ve handled credit in the past along with your credit scores. This information can impact whether or not you’re approved for a mortgage as well as determine your interest rate.
Find Out What’s on Your Credit Report
The last thing you want while you’re in the middle of a mortgage application is any surprises. Before you authorize potential creditors to look at your credit reports, make sure you know what’s on them. You’re entitled to a free credit report annually from AnnualCreditReport.com.
What to Look for on Your Credit Reports
Look closely at your credit reports and see if there are any errors on them. You may be surprised to find that the information on your report isn’t 100 percent accurate. If you find errors, you’re not alone. As many as two out of three people discover inaccurate information on their credit reports. Errors to look for include:
- Accounts that don’t belong to you
- Duplicate accounts
- Errors in your personal information
- Incorrect balances or credit limits
- Accounts reporting as past due that were paid on time
You might also find loans that you’re making payments on showing as closed accounts, or loans that you’ve already paid off showing as open accounts. Any information that’s not accurate needs to be disputed right away.
Other Steps to Take to Fix Your Credit
Once you’ve disputed anything that’s not right on your credit reports, there are other steps to take that can help improve your credit. These include:
- Pay all your bills on time and catch up on anything that’s past due.
- Pay down your credit cards. Lenders want to see your credit utilization below 30 percent if possible. The lower you can get your balances, the better.
- Avoid making new purchases on credit.
- Don’t apply for new credit cards. Too many applications in a short period of time can hurt your credit score. AKA credit inquiries.
If you’ve been using too much of your available credit or haven’t been paying bills on time, it’s time to develop better habits. You’ll need to fix these issues in order to be approved for a mortgage at the best terms.
Need Help Disputing Inaccurate Information on Your Credit Report?
Disputing errors on your credit report doesn’t have to be challenging or hard. Dovly can make the process as simple as possible. Our service runs on autopilot, so you don’t have to worry about having to check your score each month. Our credit engine works 24/7 monitoring your credit and removing any items that aren’t accurate.
When negative or inaccurate items are successfully removed from your credit report you’ll be in a better position to be approved for a mortgage and to have your mortgage approved at the best possible interest rate. Call Dovly today to find out how we can help.
Dovly’s AI credit engine can get you a head-turning credit score with credit (re)building, monitoring, alerts, scores, tips, and tricks – all in one place. Try it risk-free with our free membership tier.
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