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How Houston Homebuyers Can Improve Credit Score

You want to buy a home, but your credit score isn’t up to par. It’s a common issue among first-time buyers in the Houston real estate market! To help you learn how you can improve your credit score, and as fast as possible, your KW Memorial real estate team is here to offer you suggestions.

  • Pull credit reports. To really get the full picture of your credit history, pull your credit report and scores from all three major U.S. credit bureaus, Experian, Equifax and TransUnion. You can pull your report for free from each of these once per year. Your score should be at least 580 for a FHA loan, and 620 or higher for a loan from major lenders.
  • Make changes. If you see errors on any of your credit reports, you can dispute them. Five percent of reports have errors, according to a 2013 study, so be sure to check this. The dispute process can be long and cumbersome, so the sooner you start, the better! If you have any one-time late payments, call the company and ask them to remove it from your record. Most will!
  • Improve your standings. If you’ve got debt, start paying it off. Pay your balance down to 1 percent of your credit limit when possible. If you don’t have the money right now, ask if your credit card companies will increase your credit limit, which improves your debt-to-credit ratio. (Don’t continue to spend, though!) Make all of your payments on time as well, which will start improving your score.
  • Become an authorized user. If you’ve got a financially responsible partner, friend or family member with good credit, you could become an authorized user on one of their accounts. The history of that account will show up on your credit report immediately and could boost your credit score. Just make sure to choose someone who will continue to pay off debts and pay on time!

The sooner you start working toward improving your credit, the better. The higher your credit score is, the better chance you have at scoring pre-approval from a mortgage lender! This could take time, so it’s never too soon to start.

Ready to buy a home in Houston now? Have questions about the home-buying process or about Houston real estate market conditions? Contact us at any time! The Keller Williams Memorial real estate team is here and ready to answer all of your questions and to help guide you through the home-buying process, until you have keys in your hand to the home of your dreams. We look forward to hearing from you!