Most people who are considering buying a home need a mortgage.
Mortgages tend to be very large, with homeowners borrowing hundreds of thousands of dollars. And most mortgages are paid off over 15 years, 20 years, or 30 years. This means that borrowers pay interest on their large loans for a very long time.
For all of these reasons, it’s important to have the highest possible credit score before applying for a home loan. This is because your credit could affect the interest rate you are charged. And even a small difference in the rate you pay could end up costing you tens of thousands of dollars in additional interest.
Most of the things you can do to improve your credit can take time. This can be a problem if you are trying to buy a house now.
Fortunately, there are ways to build credit quickly. In fact, here are two that you might not have heard of. While they don’t work for everyone, they may be worth a try. Keep reading to learn more about writing goodwill letters and becoming an authorized user.
1. Write a letter of goodwill to remove negative information
Even a single late payment on your credit report can cause your credit score to drop dramatically. And if you have multiple late payments, that might be enough to disqualify you from the cheapest mortgage rates.
If you see one or two late payments from different creditors on your credit history, you may have the option to remove them from your record and quickly increase your score. You can simply write a goodwill letter and ask the creditors to remove the black dots from your case.
Now, this won’t work in all cases, as many creditors won’t when you were legitimately late. However, if you are still a customer and paid on time in most situations, but only had one or two issues, your creditor may be more than willing to work with you.
Or if you still have an outstanding balance, the creditor may agree to remove the late payment record if you make an agreement to pay your balance in full in exchange for doing so.
Clearing late payments from your file could be the fastest and best way to improve your credit if you can.
2. Ask a loved one with good credit to make you an authorized user
If you have a family member or friend with a strong credit history, they could help you improve your score. Ask if they would consider adding you as an authorized user on one of their accounts in good standing.
This would mean that the account appears on your own credit report. You would benefit from their on-time payment history, and their old accounts would help the average age of your account history, as a longer credit report is better than a shorter one. And they don’t even have to give you credit card access to do so.
It won’t help as much if you have a lot of negative information on your credit report, but it can still make a difference. And it can certainly help you quickly build a credit profile that will impress mortgage lenders if you don’t have a long credit history yet.
These two steps could make a big difference in your credit score. Give them a try if you’re hoping to get a mortgage sooner rather than later and just need a little extra help getting a great rate.
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