Improving your credit could be one of the savviest moves you’ll make as a home seller.
- If you’re selling a home, you may need a mortgage to buy another one.
- The higher your credit score is, the more likely you’ll be to obtain mortgage approval and snag an affordable mortgage rate.
You may have heard that we’re currently in a seller’s market, and that’s an accurate statement. Home values have soared on a national scale, and if you sell your home today, you might command a higher price than usual. Plus, housing inventory is still low and mortgage rates are still competitive. That means buyers may be clamoring for homes, and you might get a quick offer if you list yours.
If you’re going to sell your home, there’s a checklist of items you’ll need to tackle first. Those items include finding the right real estate agent to team up with and making minor home repairs to avoid turning potential buyers off. But there’s another key move worth making if you’ll be selling your home: boosting your credit score.
Why a higher credit score is key when selling your home
Once you sell your home, you’ll need someplace else to live. If you’re selling and downsizing, you may have enough money from the sale of your home to avoid having to take out another mortgage.
But if you’re buying a similar home or a larger one after selling, you’ll probably need to borrow money to finance it. And the higher your credit score at the time of your mortgage application, the more likely you’ll be to get approved. Furthermore, a higher credit score could be your ticket to a lower mortgage rate when you apply for a home loan.
How to boost your credit score quickly
If your credit score needs some work, there are several ways to boost it in a relatively short period of time. First, check your credit report for errors. If there’s a mistake that’s working against you, like a delinquent debt that was never yours to begin with, then getting it corrected could give your score a nice bump.
Next, try paying off some of your existing credit card debt. Doing so will lower your credit utilization ratio, which is a key factor in calculating your credit score.