With mortgage rates rising from historic lows to as much as 8% in 2023, Colorado homebuyers in Denver, Colorado Springs, Fort Collins and beyond should seize this opportunity to maximize their credit score to get the lowest possible interest rate and terms when they find the right home to buy.
As we near the end of 2023, now is the time for Centennial State residents to evaluate their credit scores and make rapid improvements. This ensures you lock in maximum savings when interest rates are cut by the Federal Reserve in the future. Whether your home lies downtown near Coors Field or nestled in Littleton’s scenic suburbs, a few months focused on credit fitness can mean thousands in value recaptured on your most important asset.
Getting your credit score above 700 can seem like a challenge, but with some strategic moves you can see your scores jump 50-100 points quickly. Follow this advice from credit experts to give your score the boost it deserves.
Focus on Credit Card Balances
“Paying down credit card debt is hugely impactful since balances make up 30% of your score,” says Beverly Anderson, President of Global Consumer Solutions for Equifax. Aggressively pay more than the minimums due, even paying in full whenever possible. High revolving credit utilization drags down credit, while persistent on-time payments make scores rebound fast.
Ask for Higher Credit Limits
Another way to shrink credit utilization is increasing your total credit limit. Call your credit card issuers to request a higher limit. If you currently only have a $3,000 limit ask it to be increased to a $5,000 or $7,500 limit. It’s recommended to utilize less than ten percent of your available credit.
Dispute Credit Report Errors
Order free reports from Equifax, Experian, and TransUnion on AnnualCreditReport.com. Sift through your report for any fraudulent/incorrect information and dispute errors in writing to quickly boost your score as negative items get removed. It’s not uncommon to find mistakes lowering scores that are fixable.
Remove Paid Off Negative Items
Collection accounts and late payments can stay on reports weighing down credit even when paid. Call agencies and creditors to request deletion for a clean slate. Even paid negatives make lenders less likely to approve you in the future. Clearing up old mistakes can lift your score dramatically.
Piggyback With Authorized User Status
Ask a friend with great credit to add you as an authorized user on their account. Their positive history gets added to your reports to help scores significantly. Make sure their card reports to all bureaus for maximum effect.
Pay Down Debt Before Transferring Balances
While 0% balance transfers help reduce interest, it’s better to pay down balances first before taking on more debt. FICO says lowering overall debt load effectively lifts your score.
Keep Old Cards Open
Don’t close unused credit cards, even when paid off. Keeping accounts open with wise usage demonstrates sound debt management. Keep in mind that long credit histories with older credit cards that have excellent payment histories improves your score too.
Can I Boost My Credit Score By 100 points?
While each person’s credit situation is unique, a 100-point score increase is realistic for many through diligent effort. Those with lower scores (604 or less) have more room for significant gains. Focus first on major factors impacting your scores negatively.
Paying down balances, clearing errors, and responsible use of credit help scores rebound sharply. Monitor changes monthly as you optimize financial habits. With consistent action lifting limiting factors, your score can surge well over 100 points in under six months.
Shop Smart When Seeking New Credit
Applying for multiple credit accounts to get the best rates can backfire and hurt your credit score if not timed strategically. Too many inquiries going after new loans and cards can appear risky to scoring models. However, FICO’s system understands rate shopping needs for a single purchase.
“To optimize your score, lump all applications into a two-week timeframe when shopping a particular category – whether it’s new cards, a mortgage, or an auto loan,” advises credit scoring expert Myra Jenkins. This way your score treats the cluster of inquiries as one event rather than a series of risky actions. Comparing offers with different lenders is no issue as long as it’s contained within a compact timeframe.
