Tips for End of Year Credit Cleanup
Having an end of year credit cleanup plan can make your dreams of home ownership a reality. It’s already October, and some advanced planning will put you in the best position to successfully apply for home loan financing after the New Year. If you’re thinking about purchasing a home in 2015, it’s never too early to start planning. Just as you are doing pre-holiday fitness routine reviews or purging your house of unwanted items, take the time to develop an end of year credit cleanup plan.
Obtain Copies of Your Credit Report and Score
If you haven’t looked at your credit report or credit score in the last six months, it’s time to do so. You are able to get copies of each of your credit reports from the three major bureaus via Freeannualcreditreport.com and you can see your credit score at CreditKarma.com for free or purchase it directly from each bureau. Scour your reports for errors and dispute them. Pay off debts that you might have missed. Endeavor to have collections accounts deleted from your report as you pay them off. These small steps can be a huge boon to your credit rating.
Pay Down Your Credit Cards
For many families, the holidays results in high credit card balances due to gift shopping and seasonal entertainment expenses. But if you’re planning to buy a house early in 2015, rethink this strategy. High credit card balances can bring your credit down significantly. Instead, consider paying off your balances and keeping them low. Use alternate plans for your holiday shopping, such as starting early, paying cash, or reducing your spending. Any money that you save can be socked away toward your down payment.
Automate Your Bill Paying
One of the easiest ways to raise your credit score is paying your bills on time; that comprises about 35% of the score. The most recent months carry the most weight. Set up a schedule that ensures you’ll pay all your bills for the rest of the year on time. Take advantage of a few months of a perfect payment history to help build up your scores.
Apply End of Year Bonuses Wisely
Many employees receive performance bonuses during the final quarter. Or perhaps your family is giving you a financial gift for the holiday season. It’s tempting to buy that new car you’ve been eying or treat yourself to some expensive designer clothes. But think about applying those funds toward your credit goals. Pay down debts and help bolster your available reserves toward a down payment. Both of these steps position you as a stronger buyer.
Are you a prospective homebuyer thinking ahead to your real estate goals for next year? Contact Sydnee Johnson today to discuss your situation, learn how much financing you qualify for, and get personal tips for your end of year credit cleanup plan.