Sprucing Up Your Credit Scores

Your credit scores from Equifax, Experian and TransUnion play a major role in determining your mortgage rates. Start working on your credit scores 3 to 6 months before you plan to buy a home.

Estimate your current score

Each person’s credit score is unique to his or her own situation, so it’s hard to say exactly what will help you boost your score. To get personalized tips for improvement, use our quick credit score estimator to see where you stand first. This free estimator includes specific tips for how you may be able to improve your score.

Check your credit reports

Since your mortgage lender may check your Equifax, Experian, and TransUnion credit reports for your application, it’s important that you check all three too. Order all three of your credit reports and FICO scores online. Review each credit report closely for possible signs of identity theft or inaccuracies. Highlight anything that you suspect may be hurting your credit score or may be inaccurate.

Develop a plan

Using your credit reports and the information from your credit score estimation, you may want to make some updates or dispute some errors with the credit bureaus. Here are some things that can and cannot help your score:

Can boost your credit score:

• Reducing your credit card balances
• Paying off small loans
• Paying all your credit cards and loans on time each month
• Avoiding unnecessary inquiries for new credit
• Asking a creditor to increase your credit limit
• Removing expired negative records (collections, bankruptcy) from your credit reports
• Removing negative fraudulent records (identity theft records) from your credit reports

Cannot boost your credit score:

• Closing credit card or loan accounts (this will actually lower your credit score)
• Attempting to remove accurate records from your credit reports
• Removing positive expired records from your credit reports
• Applying for a lot of new accounts
• Making late payments on any account
• Paying off collection accounts
• Paying off bankruptcy accounts

Requesting changes

Once you have pinpointed exactly what you need to do to boost your credit score, you should take action to make the changes. If you want to remove something inaccurate from your credit reports, submit a letter of dispute to the credit bureau. If you want to remove something fraudulent from your credit reports, report the crime to the credit bureau’s identity theft departments.

Watch and wait

Most updates take 30 to 60 days to appear on your credit reports. During this period, you should watch your credit reports and credit scores closely. A service like Score Watch or Unlimited Credit Monitoring allows you to track improvements and check your credit scores as often as you would like. When your changes have taken place and your credit scores have increased, you should start the loan application process.