Low Credit Score? 5 Little-Known Hacks That Can Help

Your credit plays an important part in the mortgage process — and it’s a major factor in what interest rate you receive on your loan.

Are you worried your score isn’t good enough? Don’t fret. 

Here are five lesser-known moves you can make that might help improve your credit:

• Request a credit line increase. Credit utilization (the amount of your available credit you’re actually using) makes up 30% of your credit score. If you can increase the credit lines you have available, your utilization rate goes down, giving your score a boost along with it. You may have the best luck getting a credit line increase with your longest-standing account (or your bank).
• Become an authorized user on another person’s account. Does your significant other have killer credit? How about your mom, sister, or uncle? Then ask to become an authorized user on one of their accounts or credit cards. They don’t have to actually give you access to their funds, but you’ll have the benefit of credit-by-association. And as long as they keep making their payments on time, your score will jump as a result.
• Dispute errors on your credit report. Pull your credit report (you get a free one annually), and check it thoroughly for errors. Are all the balances correct? Are there any accounts you don’t recognize? Are there late payments you know you paid on time? Dispute them with the credit bureau. Removing even the slightest blemish from your record could give your score a boost.
• Report your rent. If you’re still renting, then use it to your advantage. Use a tool like Rent Reporters or Rental Kharma, and make sure your monthly rents are reported to credit bureaus. As long as you pay on time, every time, it can help increase your score significantly.
• Ask your other accounts to report your payments, too. Have you had the same phone or utility provider for some time? Have you always made on-time payments? Call them up and see if they’d be willing to report your payments to credit bureaus. Not everyone will do this, but adding just one paid-up account can have a positive impact on your score, so it’s definitely worth a try.

And remember, your credit score doesn’t have to be perfect to apply for a mortgage loan. There are several other factors considered when a lender is evaluating a loan application. Want to learn more about what you can expect with your current score? Get in touch with Embrace Home Loans today. We’re here to help.