Now that it is unofficially summer here in Houston, the Houston real estate market is getting busy! If you’re ready to buy a Houston home, now is the time to do it. Mortgage rates have risen for a few weeks now, and home prices are increasing as well.
As your Houston real estate team, we’d like to share some tips with you on improving your credit score. Your credit score affects the type of mortgage rate you receive from a lender, which in turn affects your monthly mortgage payments and home affordability. The higher the score, the better!
Check out your credit report and see what your credit score is. Anything higher than 700 will most likely qualify you for a mortgage, but 760 or higher is ideal. If your score could use some work, follow these tips from Forbes:
- Pay your bills on time. This seems like common sense, but even one late payment can affect your credit score. Bill payment makes up a third of your credit score, so make yourself a bill schedule and set up automatic payments for as many bills as possible.
- Pay your bills, period. If you lose your job and fall behind on payments continually, or you have to file for a foreclosure or bankruptcy, this is catastrophic to your credit score. Avoid this if possible, and defer any payments you can, like student loans, rather than just falling behind on payments.
- Use your credit cards. Using credit cards actually improves your credit score, if you keep your usage to a minimum and you pay off the balance each month. You should never exceed 30 percent of your credit limit, and ideally, you should stay below 10 percent.
- Keep credit cards open. If you have numerous credit cards and only want to actively use one or two, store your unused cards in a safe location. Don’t close them out. This is one of those things that doesn’t necessarily make a lot of sense, but keeping credit cards open helps your credit. However, don’t open any new credit cards. Just use one or two that you already have.
- Avoid co-signing. When you co-sign a loan for a family member or friend, any late or missed payment or issue that arises from this loan will affect you and your credit score, too. When in the market for a home, just avoid co-signing altogether until after you have closed and moved into your Houston home!
As your Houston real estate team, we are ready to help you buy a Houston home as soon as you’re ready! We’re also here to help you sell your Houston home. When ready to begin the process, or if you have questions, give us a call! We’d love to help!