One major factor in whether you’re financially qualified to purchase a home is your credit rating. Whether you live in State College, or anywhere else in Pennsylvania, lending institutions will look at your credit score as a way of determining the financial risk they incur by giving you a home mortgage. What can you do to improve your credit and increase your chances of being approved for a mortgage?

D. Shane Whitteker is the owner and chief broker at Principle Home Mortgage, in State College, Pennsylvania. He specializes in helping his clients understand what’s needed to get them a great mortgage.

According to Whitteker, there are concrete actions anyone can take to improve their credit scores and buy the home of their dreams.

“During the months or years leading up to buying a home it is important to understand a number of things regarding your credit worthiness and your overall approval for a mortgage,” Whitteker says. “Credit is obvious, the better your score the more options you typically will have and the better rate you will have access to.”

Things to do for better credit:

Keep Balances Low

Whitteker recommends you try to keep your credit card balance low in relation to the card’s limit. A $500 balance on a card with a limit of $5000 is better than a $500 balance on a card with a $1000 limit.

“One way to do this is ask for an increase in the limit,” Whitteker says. “This will create a larger spread between balance and limit - thus potentially raising your credit score.”

Don’t Be Too Late
“Don’t make late payments over 30 days late. This seems obvious but to some it is not. A 15 dollar late payment has the same impact as a 500 dollar late payment.”

Limit Credit Checks

Pulling your credit reports multiple times can hurt your score, and should be avoided, Whitteker says. Car dealerships are common culprits.

“For some reason car dealerships will often pull your credit ten or more times even if you tell them not to,” Whitteker says. You can get around this by securing your own financing before going to get a car. Negotiate the price of the car before you discuss your financing though as the dealer will make money off of financing you and may not give as good of a deal if they know you are not going to finance with them.”

Build Your Credit History

“At least a year out from the time you might want to purchase a home make sure you have sufficient credit to qualify,” Whitteker recommends. “If you only have one account for say a small credit card, you will need to open and establish a payment history on at least another two accounts. This is very important. If you do have marginal credit, compensating factors may help you get a mortgage.”

Don’t Co-Sign

“This is personal,” Whitteker says. “But it is easy for someone else to hurt your score by not paying a co-signed loan.”

Learn More

To learn more about how you can improve your credit and get a great mortgage, contact Principle Home Mortgage in State College, PA today.