Give Yourself Some Credit!

Establishing Good Credit is Very Important

If you are considering the purchase of  a home and you’re going to need a mortgage then you’re going the highest possible credit rating. This takes some consideration and planning in order for it to work in your favor. It can be said that planning and working on your credit rating needs to happen before you even start scouting homes. You’ll want to get pre-approved by a lender so that you know what kind of home to focus on. Typically, a lender will look across the three main credit bureaus: Experian, Equifax, and TransUnion. Your credit score will help determine whether you will qualify for a loan, and what kind of interest rate that you’ll qualify for.  Before you go for that loan and for pre-approval here are some helpful tips that can assist you in succeeding.

First off you likely will need several accounts, or “tradelines” active. In many cases with first time home owners, it’s not about “bad” credit history, it’s about “not enough” credit history. The lender needs documented proof that you can manage your finances and that you responsibly repay debt. Lenders appreciate seeing two to three tradelines that are open and used consistently each month. It can be credit cards, car loans, utility bill payments, etc. If you don’t have a credit card it’s time to apply for a couple with good interest rates. Use them sparingly and make sure to pay them off each month in a timely fashion. If you live with a family member  try having the utility bills put in your name. You really need active accounts and you need to be managing them without error.

You really need to make sure your payments are being made on time. You must make your payments consistently on time and you must pay what’s owed each month in full. Late payments or slow and partial payments can cause major issues when it comes time to purchase a home. try to auto pay if you sometimes forget.

If you are someone who loathes credit cards and debt of any kind, you will need to get over that for this season. Credit history is huge, and how long that history has been around is a big deal. Manage your money and manage your credit. It will affect your ability to borrow money for that dream house!

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