Top 5 Suggestions to Increase Credit Score in 2025
Lenders use your credit scores to determine your interest rate, maximum purchase power, and loan risk. If you are thinking about buying a home in 2025, make sure you have checked your credit scores. Here are a few suggestions to get you on the right track.
1. Check your credit scores often to make sure there are no negative items. If something shows up, be sure to address it. Don't forget there are 3 credit reporting agencies. Lenders today request all 3 scores. Their process is then to throw out the highest and lowest. They use the middle score no matter which agency it comes from. They do not average scores or take the highest reported.
2. When at all possible, keep your balances low. Credit bureaus increase your score when you utilize less than 30% of your credit line. This does not go by each card. They add up all of your credit lines and all of your balances then determine the percentage. So, one card could be high and another low so they may balance out. Lenders also like to see balances paid off at the end of the month.
3. Lenders like to see that you can manage several accounts. It is ok to have a few accounts as long as they are managed well with the other guidelines.
4. Always pay on time. Late payments reduce your credit score and linger.
5. Lenders also like to see longevity in your accounts which shows your ability to pay over long terms.
I hope these suggestions help you. If you are thinking about buying a home in 2025, give me a call and I will get you started on the process to get prequalified for a loan from a preferred lender. After we get you prequalified, we can then start looking at homes available.
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