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How to Increase Your Credit Score

In general, credit scores are critical in the mortgage loan underwriting process so it is very important to manage your score with these simple tips:
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Keep your credit card balances low.

A major factor in determining your score is how much revolving credit (credit cards) you have versus the amount that you are actually using. Pay down your balances and keep your debt-to-credit ratio less than 30%. Remember the smaller the percentage, the better your rating.

Pay your bills on time.

Late payments can negatively impact your score, so consider setting up automatic payments from your bank accounts. The longer you pay your bills on time, the higher your credit score

Don’t open unnecessary accounts

New accounts lower your average account age, which can possibly lower your score. Instead, maintain your older accounts by keeping the balances low.

If you have been managing credit for a short time, don’t open new accounts too rapidly.

If you are a new credit user, rapid account buildup can look risky. Plus, remember new accounts will lower your average account age, which will have a larger effect on your scores if you don’t have a lot of other credit information.

If married, keep separate credit cards.

Keeping separate cards provides flexibility in transferring some or all of the balances to one spouse to increase the credit score of the other. This also provides the possibility of one spouse becoming the sole borrower without changing the ownership of the home.

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