Is buying a home on your to-do list for this year? If so, it may be time to start addressing your credit score. While it’s possible to qualify for a m…

Sourced from: realtytimes.com

If buying a new home is on your new year’s resolution list this year, take the first step by attending to your credit score. Credit scores in the 500s may mean you can qualify for a mortgage, but a higher score will certainly provide you with more options and lower rates. A difference of just a few points can mean you can afford more and make your money go farther.

Unfortunately, there isn’t one magic solution that will raise your credit score overnight, but there are some quick and easy tricks that can move you into a higher qualification zone. These tips can also help you prevent another hit to your score by making silly mistakes.

Pay off collection accounts

Some older collection accounts aren’t worth paying off if you’re strictly looking to boost your score. You may be able to pay newer accounts and see a bump in your score—if you can ensure that the creditor will report the payment to the credit agencies. Financial experts also typically agree that you’re better off paying the original creditor, not the collection agency. Your lender should be able to help you figure out your best plan of action when it comes to who to pay, and how.

Pay down your balances

Almost 30% of your FICO score is determined by how much you owe overall.   Paying down your credit card balances can have an immediate impact on your score.  In addition, the amount you owe as a percentage of your available credit, or your credit utilization, is factored in.  When creditors see a higher utilization, they may think you are overextended and likely to miss payments.  Try to get your credit utilization rate below 30%.

Get a credit card

Yes, this sounds like the opposite of what you should do when trying to improve your credit score, but the right kind of credit can make a positive difference. Use it responsibly and creditors will see you can handle payments, balances, and your overall finances.

Use Experian Boost

Experian Boost is a new product “that allows you to add utility and cell phone bills to your credit file,” they said. “Most scoring models take into account your payment history on loans and credit cards, how much revolving credit you regularly use, how long you’ve had accounts open, the types of accounts you have and how often you apply for new credit. If you’ve been making utility and cell phone payments on time, there is a way for you to improve your credit score by factoring in those payments through a new, free product called Experian Boost.”

Dispute Any Inaccuracies on Your Credit Reports

“You should check your credit reports at all three credit reporting bureaus…for any inaccuracies,” said Experian. “Incorrect information on your credit reports could drag your scores down. Verify that the accounts listed on your reports are correct. If you see errors, dispute the information and get it corrected right away.”

Sign up for automatic payments

Payment history is a huge part of your credit score—35%! With so much at stake, on-time payments should be a priority. We all know that accidents happen. Setting up automatic payments can help you avoid those oopsies. Some companies, including phone, utilities, and gyms, also offer monthly savings for setting up automatic payments.