The Importance of a Strong Credit Score and How to Improve Yours

A strong credit score can make a significant difference when applying for a mortgage. It affects your ability to secure a loan, the interest rate you receive, and even the total cost of homeownership. At Elevated Home Loans, we’re here to help you understand how to improve your credit and explore your loan options, even if your score isn’t perfect.

I Have a Low Credit Score, How Can I Improve That?

If your credit score is lower than you'd like, there are actionable steps you can take to improve it:

• Pay Your Bills on Time: Payment history is the most significant factor in your credit score. Setting up autopay or reminders can help ensure you never miss a due date.
• Reduce Credit Utilization: Try to keep your credit card balances below 30% of your credit limit.
• Avoid Opening Too Many New Accounts: Each hard inquiry can temporarily lower your score, so only apply for credit when necessary.
• Check Your Credit Report for Errors: Mistakes on your report can drag your score down. You’re entitled to a free annual credit report from the three major bureaus via AnnualCreditReport.com.
• Become an Authorized User: If a trusted friend or family member adds you as an authorized user on their account, it can help build your credit history.

Need help improving your credit before applying for a mortgage? Contact us today for expert advice.

How Long Does It Take to Improve My Credit Score?

Improving your credit score is not instant—it requires consistency and time. The timeframe depends on the specific factors affecting your score:

• Minor Improvements (1–3 months): Paying off a large credit card balance or disputing an error on your report can lead to quick gains.
• Moderate Improvements (6–12 months): Establishing a pattern of on-time payments and reducing debt gradually builds credit strength.
• Major Improvements (1–2 years): If you’re recovering from significant credit issues, such as a bankruptcy or foreclosure, it may take longer to rebuild your score.

The Consumer Financial Protection Bureau (CFPB) offers additional insights into improving your credit over time.

My Credit is Locked—How Can I Unlock It?

A credit freeze or lock is a security measure that prevents lenders from accessing your credit report, which can be a barrier when applying for a mortgage. If your credit is locked:

1. Identify Where It’s Locked: Contact the credit bureaus (Experian, Equifax, and TransUnion) to determine where the freeze is in place.
2. Log Into Your Account: If you placed the freeze online, you can typically remove it through your account.
3. Call or Mail a Request: If you set the freeze via phone or mail, you may need to submit a written request for removal.
4. Temporarily or Permanently Lift the Freeze: You can choose to lift the freeze temporarily for new applications or remove it entirely if no longer needed.

Visit the official bureau websites to manage your freeze:

• Equifax
• Experian
• TransUnion

Need help unlocking your credit for a mortgage application? Reach out to us today.

My Credit Score is Low—Can I Still Qualify for a Loan?

Yes! While a higher credit score typically provides better loan terms, there are options available for borrowers with lower credit scores:

• FHA Loans: Require a minimum credit score of 500 with a 10% down payment or 580 with a 3.5% down payment.
• VA Loans: Available to eligible military members with no minimum credit score required by the VA (though lenders may have their own guidelines).
• USDA Loans: Require a credit score of 640 or higher for eligibility in rural home financing programs.
• Subprime and Alternative Loans: Some lenders offer non-traditional loan products for borrowers with low credit.

The Federal Housing Administration (FHA) provides guidelines on credit score requirements for FHA-backed loans.

If you’re unsure about your options, schedule a consultation with us to discuss loan programs tailored to your financial situation.

Strengthen Your Credit and Secure the Right Loan

Your credit score plays a major role in your mortgage eligibility, but it’s never too late to improve it. Whether you’re looking to boost your score, unlock your credit, or find a loan that fits your needs, Elevated Home Loans is here to help.

Have questions? Contact us today and take the first step toward homeownership!