If you are a veteran and you are working on getting a home, you first need to take some time to clean up your credit report. When getting a VA loan, your credit report matters. You will get a lower interest rate if you have a better credit score. You will also be able to put aside a lower down payment if you have a better credit score. That is why you need to take some time to make sure your credit report is in good shape.
Check Your Credit Report
First, you need to check your credit report. You need to start by requesting a copy of your credit report from all three major credit reporting agencies. The reports from each agency will not be the same; each agency has a different formula for figuring out your credit score, and they collect information differently.
Getting a copy of your report from all three major credit reporting agencies will allow you to most accurately see how your credit is being reported. This will give you the most accurate information you need to fix your credit score.
Boost Your Credit Score
If you have a positive record of paying your cell phone as well as your utility bill on time, you can give your credit score a nice little boost by signing up for a program like the Experian Boost. This, for example, will help improve your credit score that you get from Experian. They will start to look at your utility and cell phone payments and use your history of on-time payments for these important bills to improve your credit score.
Create a Plan for Paying Off Debt
Next, you need to create a plan that will allow you to pay off your debt. You need to lower your debt to credit ratio by paying off your loans. You want the debt that you carry to be lower than the available credit that you have access to.
Start by paying off your credit cards. Your credit cards are primarily how your debt to credit ratio is calculated, and your credit cards often carry the largest interest rate. Work on lowering the balance on all your credit cards. Get your credit card balances as close to zero before you apply for a loan.
Keep Your Credit Cards Open
Once you pay off your credit cards, keep them open. Use a credit card to pay a bill or two each month, and then keep the balance below zero. Closing your cards can damaging to your credit score, which is why it is best to keep your credit cards open once you pay them off.
Take Care of Any Mistakes
If you find mistakes, you are going to need to investigate and come up with evidence that shows that the information is wrong. You will have to write to the credit reporting agency, and it can take a while for your credit report to change.
Before applying for a VA loan, take some time to check your credit report, pay off credit card debt while keeping your credit cards open. Work to increase your credit score will help you take advantage of better terms on your VA loan.
Reach out to a VA home loan service to learn more.
Share30 April 2019
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