Leah Manderson and her husband Mark were looking to purchase their new home. Having received raises at their jobs and enjoying the perks of two salaries, they decided that they had enough to afford a down payment for a 1940s bungalow in the heart of Atlanta.
With confidence in their credit score, they went to their loan officer to discuss their options for a mortgage. Leah knew that their scores would play a huge factor in the interest rate that they would receive and felt comfortable knowing that she didn’t have any red flags or late payments on her credit report. After taking a look at their credit score, the loan officer pauses, then looks over at Leah. Her score was at 680. While this is not a horrible score, they would end up having a higher interest rate applied, therefore causing them to pay over $18,000 over the length of the loan. Mortified but determined, Leah eventually managed to get her credit score back on track. Here are some strategies that people like Leah use to increase their scores.
When you stop defaulting to your credit cards and only use it for purchases such as online products or plane tickets, you won’t rack up a huge bill at the end of the month which can cause high credit card utilization.
Getting multiple hard inquiries on your credit report can affect your score. For example, if you open up a line of credit and a credit card within a span of 3 months, you’re going to look like someone who has to rely on credit limits to get by.
There are multiple companies that provide a free credit report – this doesn’t count as a hard inquiry. By taking advantage of this, you can determine where your score is currently at, if you have any late payments or delinquencies, and receive tips on how to improve it.