Renovating your home is a great way to not only improve its value but also have a more functional and better-looking space. Unfortunately, making renovations doesn’t always come cheap.
While there are many ways to pay for home improvements, one of the most common is to borrow money to do so. However, if you want to borrow money affordably to renovate your home, you need to make sure your credit is in a good place. With that in mind, this article is going to go over a few ways to improve your credit score to allow you to renovate a home.
One of the simplest, best, and quickest ways to improve your credit score is to look through your credit report for errors. While things like missed payments, using too much credit, and constantly applying for new credit can hurt your score, so can mistakes.
If there are errors or other incorrect numbers on your report, you want to remove and correct them as soon as possible. In order to get these errors dealt with, you will need to reach out to the credit bureaus with your dispute. By writing the correct type of credit repair letter, you can give yourself the best chance of success. Once the issues have been dealt with, you will see your credit improve.
A lot of factors go into influencing your credit score, but one of the biggest is your payment history. The better you are at making your payments, the better your credit will be. While a missed or late payment every now and then isn’t the worst, you absolutely don’t want to make it a habit.
Keep track of when your credit card statement goes out every month, and make an effort to pay it in full. Setting reminders for yourself can help if you often forget. Sure, this method won’t increase your score overnight, but will certainly improve it over time.
Another important factor in determining your credit score is keeping your credit utilization rate low. This is essentially the percentage of your available credit that you use every month. In general, it is recommended to keep it around 30% or lower.
If your credit utilization is kept low, it can show lenders that you are managing your credit well, and not overspending. This is reassuring for these lenders and can make you a good candidate for borrowing. If you spend at or near your credit limit already, many lenders may not feel comfortable giving you more debt.
The age of your credit is another factor in your score. Lenders will look at how long you have had certain credit accounts open before giving you money, in many cases. In general, someone with a decade of borrowing history will generally have an easier time with lenders than someone who has only had a credit card for six months.
The older your average age of credit, the more likely lenders are going to be willing to work with you. This shows you have been able to successfully handle credit for a long time, without issues. So even if you get a new credit card, it is a good idea not to close it, at least not until this new credit account is much more established.
In conclusion, these tips will be able to help you improve your credit score so you can begin to remodel and renovate your older home.