If you’re planning to refinance a mortgage, it’s natural to wonder whether there are steps you can take to improve your credit score before applying.
That was the question posed to Darren Zagarola, CFP®, CPA/PFS, in a recent NJMoneyHelp article. The reader wanted to know the fastest way to boost a credit score ahead of a planned mortgage refinance.
In his response, Darren begins by explaining the factors that influence a credit score, including payment history, outstanding debt, length of credit history, types of credit accounts, and how often new credit is requested.
He notes that one of the first steps anyone should take is reviewing their credit reports for inaccuracies. Darren recommends regularly checking reports from the major credit bureaus and correcting any errors that could negatively impact a score.
Darren also discusses the importance of paying bills on time and keeping credit card balances low relative to available credit limits. He explains that late payments can significantly damage a credit score and that reducing credit utilization can help improve it. Another option, he notes, may be increasing available credit limits, although that approach should be used carefully.
For those looking to improve their score in the short term, Darren advises avoiding new credit applications, as they can sometimes negatively affect credit scores.
You can read Darren’s complete response in the original NJMoneyHelp article: Can I Raise My Credit Score for a Refinance?
If you’d like to learn more about Darren and how he helps clients navigate important financial decisions, be sure to visit his advisor profile.
