Finding the best mortgage options and rate depends on your down payment and your credit score. If you have the down payment but need to increase your credit score, this article can help.

When it comes to getting a mortgage to buy your dream home, Riva Title Company knows just how important the first meeting with your lender is. So important that the past post focused entirely on the topic. One of the key points in the article was ensuring that your credit score is accurate.

Improving Your Chances of a Good Mortgage Rate

This article aims to build on this further with tips on how you can improve your credit score, in turn, improving your chances of a lower interest rate and better home loan options. Keep reading to find out more.

Do You Use Credit?

If you don’t interact with credit then you can’t affect your credit score. For example, if you manage your money well enough to pay your bills directly from your bank account, then you aren’t giving credit agencies much information to use when considering your credit score. Consider obtaining a small credit card which you use only to pay your monthly bills. However, instead of accruing debt and then spending all of your money throughout the month, immediately transfer the funds from your savings account to your credit card, even before the statement issues. This can help boost your credit score as you will have an ongoing history of managing a line of credit and paying your credit card bills on time each month. Once you begin to look for your dream home, it's important that you take steps to secure its title. Speak with an expert at Riva Title Company at 786-787-7888 before settlement to find out how title insurance in Miami, FL can protect you.

Roll It Up

Multiple debts across a range of store and credit cards and paying the minimum balance isn’t a good way to improve your credit score. The more liabilities you have, the less your score can grow. Instead of paying off cards, consider options like a debt consolidation loan. The benefits of a loan can include:
  • One liability with one lender.
  • A loan differs to a credit card because it has a structured payment schedule which decreases the amount owing with each payment.
  • One single payment means you are less likely to miss a payment (more on this below).
  • There is a scheduled end date which creditors can rely on.

On-Time Payments

Every time that one of your payments is late, it is recorded on your credit file and reflects on your credit score. The more late payments you make, the lower your score. One of the easiest ways to ensure that you don’t miss any payments is by setting up a direct debit. Direct debits can work great when used in conjunction with a separate bank account which holds all of the money in your budget set aside for bills. Over a period of time with on-time payments, your credit score can begin to increase as you demonstrate your ability to manage your funds and commitment to your financial responsibilities.

Don’t Take on More Debt

One of the worst things which you can do leading up to a mortgage application is to take on more debt. The more debt or even just the availability to take on debt, the lower your score will be and the more liabilities you have. As an example, if you take on a store card simply because it includes a promotion offering you a large number of points, even if you don’t use the card, the available credit balance is considered a financial liability when your credit score is concerned. If you do take up a new card, be sure that it replaces one which you close immediately.

Title Insurance in Miami, FL Provides Financial Protection for Your Home’s Title

Once you are confident in your credit score and are ready to apply for a mortgage and find your dream home, it’s important that you complete your due diligence. Items like title insurance aren’t nice-to-haves but are must-haves. To find out more about how title insurance in Miami, FL can protect your home ownership and give you peace of mind, speak with an expert at Riva Title Company today by calling 786-787-7888. Available only prior to settlement, title insurance in Miami, FL is something you simply can’t afford to not take up.