5 Hacks You Can Do Right Now to Jack up Your Credit Score Before Applying for a Mortgage

If you’re thinking of buying a house and applying for a mortgage someday, you might want to work on your credit. Lenders will look at you as nothing but a risky liability if your score is under 600. With a low score, the odds of you getting approved for a conventional mortgage are pretty slim.

It can take some time to get your credit score back in the green, but that’s the name of the credit game – good behavior and some patience can get you there. The good news is that there are some things you can do right now to give your credit score a boost.

Scope Out Errors on Your Credit Report – and Fix Them

Don’t just assume that whatever is on your credit report is 100% accurate. In fact, a recent study from the Federal Trade Commission discovered that five percent of consumers reported at least one mistake on their credit report. A lot of these mistakes can put a huge dent in your credit score.

Do yourself a favor and get your hands on a copy of your credit report, which you’re legally entitled to once a year for free from all three credit bureaus: Equifax, TransUnion and Experian. Once you get it, go through it with a fine-tooth comb and fight any errors you come across.

Don’t Completely Wipe Out Your Debt History

Once you’ve completely paid off a debt, you might be tempted to wipe it off your credit history and close out these accounts. Sounds like the sensible thing to do, right? The thing is, closing an account can actually have a negative effect on your credit score. Actually having some debt that you’ve been able to pay on time every month can be a positive factor for your credit.

The length of your credit history makes up 15% of your entire credit score. If you close old accounts, you’re basically shortening your total account length, which will backfire on you. If you scored straight A’s in high school, would you want that nice bit of information wiped off your records? Probably not. The same goes for good old credit.

Instead of cutting up an old credit card that you’ve paid off and don’t use anymore, tuck it away and keep the account open to continue building your credit history length.

Ask Your Creditors To Cut You a Break

Believe it or not, but your creditors are not your mortal enemies. In fact, sometimes just asking for forgiveness on a delinquent payment or two might just get you some slack. Bill payment history makes up 35% of your credit score, so even one late payment can be enough to drag your scores down.

Asking your creditor to wipe off even just one black mark from your record can do wonders for your credit score. This is called a “goodwill deletion,” and is something creditors might be willing to do for borrowers who have had a late payment or two on their records (but not necessarily for the eternal delinquents).

Mix Up Your Credit

Lenders aren’t exactly in the business of dishing out cash to just anyone off the street. They need to make sure that the people they’re lending to have the good financial behavior that they expect. One way for them to identify you as a competent borrower is by looking at your various accounts. If they’ve only got one loan to look at, they really can’t gauge how likely you’d be to repay them. Lenders like to see that you’re able to manage paying off all sorts of accounts at once.

Add a small installment loan (with fixed payments and a due date) and pay it back within the required time period. Throwing in a few other loans into the mix can help add good credit to your revolving credit (your credit card). This tactic can help boost your credit score by as much as 30 points.

Ask for a Credit Line Increase – and Do NOT Max it Out!

Just because your credit card company gave you a credit limit of $10,000 doesn’t mean that you should immediately head out to the mall and drop your plastic at every store you come across. Maxing out your credit card will do nothing but send your credit score south.

Instead, keep a nice gap between your credit limit and the amount you’ve actually charged to your card. This cushion can give your score a boost by as much as 15-20 points.

These tips sound pretty simple, right? There’s no excuse – these hacks can be done right now, and can have a huge impact on your credit score. Remember – the higher your credit score, the better your chances of avoiding the dreaded “DENIED” stamp on your mortgage application.