A good credit rating is essential in securing a mortgage loan, which in turn may secure you an investment. According to credit.com, 1/3 of Americans still has bad credit even after the US economy has recovered from the Great Recession. A good credit score can dictate whether or not you can be approved your credit card or loan application.
If you want to apply for a loan from a bank or a multifamily lending company like Bonneville Multifamily Capital, you first have to make sure that you have an excellent credit rating. Here are four ways to improve your credit score.
1. Check and update credit report
Unless you don’t have an existing credit record, it is advisable first to check your credit report. It contains all the necessary information to verify your credit rating. Make sure that all information are correct and updated. If there are any discrepancies, dispute them with the credit bureau.
2. Provide proof of income and decrease credit card balance
Aside from providing your proof of income, check your remaining credit available. Ideally, lending companies would only loan an amount that comprises 30% of your remaining available credit or liquidity.
3. Manage and reduce debt.
First, reduce your credit card balances to increase your available credit. Also, eliminate existing debts. Mortgage companies usually check some monthly payments you have, and if you have many debts on hand, you may have a hard time getting approved.
4. Pay bills and mortgages on time
When payment dues are updates, it reflects it is a reflection of good financial discipline. Usually, delinquent payments can largely affect the confidence of a lending company to approve mortgages. When you have a good and current payment standing, the better your credit score can get.
Increase score by reducing debts
The key is to ensure lending companies that you have the capacity to pay. Update your credit records and show that you have a good financial discipline to improve crediting rating.