After a bankruptcy is discharged, many lenders will offer you a home loan. In most cases, these lenders do not require new lines of credit or a high credit rating. Buying a home with good or fair credit has its advantages. These individuals likely obtain better mortgage rates and qualify for a range of home loans. Here are a few tips on ways to raise your credit score before applying for a mortgage.

Pay Creditors on Time

The habit you adopt for paying creditors can have a negative or positive effect on your credit report. If bills are regularly paid on time, your score will soar. Yet, paying a bill one day late may decrease your credit score by as much as 10 points.

If possible, pay bills a couple of days before the due date. Waiting until the due date to pay credit card bills will not have a negative effect on your score however, you may gain a few extra points with early payments.

Maintain Low Credit Card Balances

Following a bankruptcy, it is essential to open a new line of credit. This can be in the form of a credit card, gas card, retail store card, etc. If applying for a new credit card, avoid high balances. Ideally, consumers should keep credit cards at approximately 25% of the limit. Keeping a large balance will lower your credit score.

Stay Away from Credit Inquiries

Although credit inquiries are inevitable, especially when trying to re-establish credit, avoid applying for too many credit accounts. Many consumers are unaware of the damaging effects of inquiries. However, one inquiry can lower your credit score by 10 to 12 points. Because credit scores are already low following a bankruptcy, it is very important to keep inquiries to a minimum.

Carefully Monitor Credit Report

When attempting to boost your credit score, regular credit report monitoring is important. Homebuyers hoping to get approved for a prime rate mortgage will need a credit score of at least 680. After a bankruptcy, it will take time to achieve a high credit rating. However, if you take immediate steps to boost your score, it may be possible to get approved for a low rate mortgage within 24 months.