If you’re eager to move into your dream home, preparing your credit for a mortgage approval should definitely be on your agenda. Laura gives six tips for building credit before you apply for a mortgage, so you get a loan that costs as little as possible.
Tip #6: Shop strategically for a mortgage
The last tip is to carefully plan when you’ll apply for and shop different mortgage lenders. Applying for a new credit account is called a hard inquiry and it dings your scores. However, a cluster of similar applications completed within a short period of time, such as 2 to 3 weeks, won’t hurt as much.
Credit scoring models recognize typical shopping behavior and won’t penalize you for comparing offers. So come up with a list of lenders you want to shop and apply for multiple loans quickly.
Also, this not the time to shop for a new car, open retail store cards, or new credit cards. Wait until after you’ve moved into your new home to make any new credit requests so they don’t spoil your mortgage terms.
Remember that every credit score point counts! Use these tips as far in advance of buying a home as possible to avoid getting turned down for a mortgage or paying more than you should.
For more tips on how to review, repair, and build your credit, check out my free Credit Score Survival Kit. It’s a multimedia tutorial that includes a video, audio, and e-book that teaches you 3 smart and legitimate strategies to build excellent credit.
See also: How to Get Credit With No or Bad Credit
Get More Money Girl!
Want to know the best financial and productivity tools that I use and recommend to save time and money? Click here to check out 40+ tools I recommend!
To connect on social media, you’ll find Money Girl on Facebook, Twitter, and Google+. Also, if you’re not already subscribed to the Money Girl podcast on iTunes or the Stitcher app, both are free and make sure that you’ll get each new weekly episode as soon as it’s published on the web. You'll also find the show on the Spotify mobile app.
There’s a huge archive of past articles and podcasts if you type in what you want to learn about in the search bar at the top of the page. Here are all the many places you can connect with me, learn more about personal finance, and ask your money question:
- Dominate Your Dollars - Laura's private Facebook Group
- Money Girl on Facebook
- Laura on Facebook
- Money Girl podcast on iTunes (it’s free to subscribe!)
- Money Girl on the Stitcher app (also free to subscribe!)
- Email: LauraDAdams.com/contact
To learn about how to get out of debt, save money, and build wealth, get a copy of my award-winning book Money Girl’s Smart Moves to Grow Rich. It tells you what you need to know about money without bogging you down with what you don’t. It’s available at your favorite bookstore as a paperback or e-book. Click here to download 2 FREE book chapters now!
Hands Holding House image courtesy of Shutterstock