ôô

How Can I Raise Bad Credit Scores and Qualify for a Mortgage?

Building credit takes time. Money Girl gives you 5 smart ways to boost your credit score.  

By
Laura Adams, MBA

How Can I Raise Bad Credit Scores and Qualify for a Mortgage?

by Laura Adams

Q. Several years ago we were 90 days late making our mortgage payment. However, we did a loan modification, got current with our payments, and haven’t been late since. The problem is that the delinquency still hurts our credit. How can we pull up our bad credit scores and qualify for a mortgage?

A. Since building credit takes time, I recommend that you focus on the factors that are within your control:

  1. Check your credit report for errors. Incorrect information in your credit file can cause your scores to remain low. Visit annualcreditreport.com to view your reports for free and dispute any errors right away. 

  2. Pay bills on time. Your payment history is the biggest factor used to calculate your credit scores. Even one late payment can damage your credit for years. So make sure that you stay on top of your bills and credit accounts so you never let a due date slip by.

  3. Use credit accounts. In order to build credit, you must have credit accounts and use them responsibly. Make sure to have at least one credit card that you use for small purchases each month. Then pay off your bill in full by the statement due date.  

  4. Reduce your debt. If you’re carrying high balances on credit cards or lines of credit relative to your credit limits, pay them down as quickly as possible. A good rule of thumb is to keep balances below 30% of your credit limit.

  5. Consult with lenders. If you’re trying to get approved for a consumer loan or mortgage, consult with several lenders about their approval guidelines. They’ll help you understand their specific requirements and make recommendations to improve your credit—so you can qualify as quickly as possible.

Other Links You Might Like:
5 FAQs About Your Credit Score
How to Get a Credit Card with Bad Credit
25+ Best Tools for Money Management and Productivity
Credit Score Survival Kit – a free multimedia tutorial with strategies to raise your credit scores!

Get the Money Girl Book!

Looking for more money advice or a great gift? Pick up a copy (or several!) of Money Girl’s Smart Moves to Grow Rich. It tells you what you really need to know about money without bogging you down with what you don’t. Get the ebook version or paperback at your favorite book seller today!

Follow Me on Pinterest

Eraser and bad credit from Shutterstock

About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a trusted and frequent source for the national media. Her book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show. 

The Quick and Dirty Tips Privacy Notice has been updated to explain how we use cookies, which you accept by continuing to use this website. To withdraw your consent, see Your Choices.