Buying a house is a major milestone, but it can be difficult to do if your credit score is low. Fortunately, it's possible to improve your credit score in a relatively short amount of time. With the right steps, you can fix your credit score and be ready to buy a house in two to three months. When you're trying to increase your credit score, time is on your side.
The more you do to improve your credit, the longer it will take. That's why it's important to start early before you start looking for a home. Paying off your credit card balance or most of it can give you a quick reset of the score, and partnering with an account with a good credit score can give your credit more credibility. Using less of your available credit can also help increase your credit rating enough to get a lower interest rate on a mortgage loan.
It's important to keep in mind that closing a credit card can lower your score because it takes your credit history and limit with you. Late payments will have less of an impact on your credit score the longer they appear on your report. If you're one of the many people with poor credit ratings, there are ways to quickly correct your credit score. According to an FTC study, one out of four credit reports contained errors with a significant impact on credit ratings.
Paying off any outstanding debts and keeping your credit balances low can help improve your score by up to 30% in just a few months. It's also important to remember that employers and landlords may check your credit score during the hiring process or when you're looking for a place to rent. Even if you have bad credit, it doesn't mean you can't buy a home. However, taking out a mortgage loan will cause a short-term decline in your credit rating followed by an increase after several months of regular payments.
If you want to buy a house but have bad credit, now is the time to fix it. With the right steps, you can improve your credit score and be ready to buy a house in two to three months.