3 Unexpected Tips to Boost Your Credit Score Before Applying for a Mortgage

Are you gearing up to apply for a mortgage? Then you need to make sure that your credit score is in tip-top shape. 

Sure, people with bad credit can get a mortgage. People with fair credit can too. But if you can push your score into the next bracket before you apply, you’ll end up paying way less in interest every month. 

Of course you know to pay your bills on time if you want a good score. But if you already do that, there’s still more you can do to bump up your score as much as you can in a short amount of time. Read on to learn 3 unexpected ways to boost your credit score fast. 

1. Keep Your Utilization Ratio Below 10% on Every Credit Card

A utilization ratio is the amount of credit you have available, compared to how much of that you currently owe. Keeping a utilization rate of 30% per credit card is great, but 10% is excellent and should be what you strive for when preparing to apply for a mortgage. 

Obviously, the best case scenario is to already have the money available to pay down all your cards to 10%. However, if that’s not possible, you should strategically pay off your debt. 

For example, let’s say you have two credit cards. One has a limit of $20k, but you only owe $2k. The other has a limit of $5k, but you owe $4k. Before you apply for your mortgage, you’ve decided to budget around $3k from your next paycheck to apply to your remaining credit in an attempt to quickly raise your score.

You might be thinking the best idea is to pay off the first credit card completely and then apply the amount remaining to the other card. After all, it probably looks a lot better to have such a high limit card with no balance, right? 

Not really. In this case, you’re better off using the bulk of your money to pay down the other card so it hits within the 10% utilization ratio. 

Sure, in the end you would have the same amount of debt in total if you decided to just pay off the first card instead. And while minimizing your debt will help your score, by paying down the other card first, you’ll likely gain a few more points. 

2. Become an Authorized User 

Another quick way to help your score is by becoming an authorized user on someone else’s credit card like a spouse or a parent. When you do this, their payment history on that card will now count as a part of your payment history. 

This can be a great option for someone who doesn’t have a very long credit history. The length of your credit history accounts for 15% of your credit score. So, you could wait another few years before you apply for a mortgage to lengthen your history, or you can take a shortcut by using someone else’s (good) credit history. 

The caveat to this is that you really have to trust the person whose name the credit card is in. You have to trust that they’ve always paid their bill on time and responsibly and that they will continue to do so in the future. 

And just as importantly, you have to trust you! If the temptation to overspend using their card is a real possibility, don’t give yourself the option to potentially hurt their credit someday.

3. Pay Your Bill Before Your Issuer Reports Your Payment History

Each month, your creditors report your payment history to credit bureaus. Whatever they report has the potential to positively or negatively affect your score. 

The more debt that’s paid off when that payment history is reported the better your score will be. If you’re trying to raise your score as quickly as possible, paying before that report is crucial. 

If you pay your bill after your issuer already reported your payment history, that new balance won’t be reflected in your credit score until the next month. 

Call your credit card company now and find out what date they report your score. Then in the month before you apply for your mortgage, be sure to pay off as much as you can before the report date.

Try These Unexpected Tips to Quickly Raise Your Credit Score

The better your credit, the better off you’ll be when applying for a mortgage. With these unexpected tips, you should be able to raise your score—every little bit helps!

Are you looking to apply for a mortgage? Then contact us to learn more.  

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