Your credit is one of the most important factors in qualifying for a home loan, and it will determine what sort of interest rate you are able to get. That interest rate can make all the difference when it comes to how much home you can afford and keeping your payments within your budget. If you have some credit problems, it’s a good idea to try to improve your score before you buy a home. Here are some simple ways to do that. Careful Use Of Credit Credit cards are unsecured debt, and a lot of that type of debt can make lenders nervous. If you are carrying high balances on your credit cards, paying them down can make a big difference in your score. It will give you a better free credit to debt ratio and show that you handle credit responsibly. When you are looking to buy a home, it’s a good idea to avoid taking on any new debt. Don’t apply for any more credit cards or increase the limits even if they are offered to you. Keep your credit stable and focus on paying off the debt you currently have. Be sure to make all of […]
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Finding your credit rating can be an intimidating task, but for anyone hoping to purchase a home it is a necessary step. Your credit rating has a huge effect on the process of purchasing a home, from the types of lenders you will approach, to the type of loan you will get, to the interest rate you will be offered. So how can you find your credit rating, and how do you evaluate it? Finding Your Credit Score There are three major credit companies in the United States that offer you free access to your credit score—Experian, TransUnion, and Equifax. These companies can give you a detailed breakdown of your credit situation; however, don’t assume that each report will be identical. Since these reports are free, it is in your best interest to get all three to be sure that you are getting the complete picture. Understanding Your Credit Score When obtaining your credit report be sure that you request a consumer report. These reports are simplified and designed for the average consumer, and are less confusing than the reports which are sent to lenders. Your credit report will likely contain four sections, including personal information, credit history, public records, […]
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Buying a home can be both exciting and stressful but, for those with past credit problems, the process may also seem intimidating. The good news is that many lenders have adapted to the idea that many hopeful homeowners simply need a second chance, which means that past credit problems no longer have to define your future. Credit Blemishes When life unexpectedly takes a turn for the worst, it’s not always possible to come out without a few bumps and bruises. Every day, people are faced with late or missed credit card payments, mortgage foreclosures, bankruptcy proceedings, auto repossessions and even civil judgments that will affect their credit reports for years to come. Whether it’s from a job loss, injury or just a simple case of temporary hardship, credit blemishes are often a part of life. The good news is that they no longer have to prevent you from becoming a homeowner. Give Yourself A Little Credit After experiencing a credit problem, most lenders will want to see an attempt to rebuild your credit through a steady payment history with a new account. This can be accomplished by applying for a credit card and maintaining a responsible use of the account. […]
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