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5 Tips to Quickly Boost Your Credit Score Before Refinancing

If you want today’s lowest refinance rates from the best mortgage lenders you need to have a minimum credit score of 740. If you’re frustrated that the refinance rate quotes you’re getting are coming in higher than what lenders are advertising the likely culprit is your credit score.

Here are 5 tips for improving your credit score before applying for your next home loan.

How to Quickly Boost Your Credit Score

  1. Pay Down The Balances on Your Credit Cards
  2. The balances on your credit cards account for 30 percent of your credit score. Paying down your credit cards is the fastest and easiest way to boost your credit score. Try to pay down your balance down to less than 30% of your limit on each card.

  3. Check Your Credit Reports For Errors
  4. You can get a copy of all three of your credit reports by visiting the website AnnualCreditReport.com. Removing mistakes from your credit reports can boost your score by as much as 100 points once the error is fixed. Common overlooked mistakes include medical billing collections.

  5. Dispute Mistakes With Each Credit Bureau
  6. If you find mistakes in your credit reports you’ll need to dispute the error with each credit agency reporting the mistake. There are three credit bureaus that maintain your credit reports including Equifax, Experian and Transunion. If you’re disputing items on your credit report you’ll also want to contact the creditor to get the disputed item resolved and removed as quickly as possible.

  7. Avoid Applying For New Credit
  8. Old unused accounts only help improve your credit in you use them occasionally. Creditors are looking for responsible use of credit. Applying for new accounts or making major purchases like a new car could be seen as overextending yourself.

    If you have a choice between opening a new account or using an old credit card to make a purchase before paying down the balance it’s best to opt for paying with the old credit card.

    The general rule of thumb is to avoid applying for new credit before taking out or refinancing your mortgage.

  9. Avoid Closing Credit Card Accounts
  10. Closing credit accounts like those department store charge cards is more likely to lower your credit score. Having credit available isn’t a bad thing, unlike carrying large balances or maxing out your credit cards. You’ll get the most bang for your buck by paying the balances down below 30% of your credit limit.

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{ 1 comment… add one }
  • Jessica Johnson November 26, 2012, 9:44 am

    I was able to raise my credit score after I got a couple of secured credit cards who reported to the credit bureaus. Great article and thanks for the write-up!

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