If you’re thinking about buying a West Knoxville home this year, having good credit is an essential part of the equation when it comes to being approved for a mortgage. If your credit is the only thing holding you back from taking advantage of historically low interest rates, here are a few ways to help improve your credit and make buying a West Knoxville home for sale possible.
Lower Your Overall Credit Utilization Ratio.
Oftentimes, you hear of “reducing your debt” when it comes to improve credit. While that is true, your credit is not 100% based on how much debt you have. It is based on how much debt you have based on your total available debt, in other words your credit utilization ratio. For example, if you have two credit cards with a combined credit limit of of $10,000 and you have $4,000 balance, you have a credit utilization ratio of 40%. It is generally best to have a debt utilization ratio of less than 10%. An increase in credit limits or a decrease in balances will improve your credit score.
Avoid Opening Up Any New Revolving Credits.
While it can look good to have a high credit limit with a low balance, you should avoid applying for any new credit cards if you are thinking about buying a West Knoxville home soon. Every time you apply for a new credit card, it shows up on your credit score and dings your score. So, if you’re planning on buying a West Knoxville home anytime soon, avoid opening new credit cards, each little ding on your credit can do bad things.
Get An Installment Loan.
While it is important to avoid opening up multiple revolving accounts in a short period of time, it can look good to have an installment loan (car loan or small personal loan). An installment loan can really help boost your score because it shows that you are able to handle a consistent amount of credit each month responsibly.
Pay Your Bills On Time.
It the chaos that can be our daily lives, it can be easy to forget a payment. If you’re thinking about buying a West Knoxville home anytime in the near future, one late payment can do some credit damage, so be sure you have a system in place to be sure all your bills are paid on time.
Have Your Credit Checked.< Prior to buying a West Knoxville home, it is better to work out credit issues sooner rather than later. So, if you think you may buy a West Knoxville home this year or in the near future, have your credit looked at soon, that way you can address any potential problems or correct any mistakes in enough time. Are you looking to buy a West Knoxville home for sale? If there is anyway Knoxville Home Team can assist you, please let us know, you can give Rick at call at 865-696-9002 or send an email to [email protected]. Kati can be contacted at 865-392-5880 or via email at [email protected]. Also, be sure to check out our home search page to see what homes are for sale in the West Knoxville area.