Financing and Your Credit Score
Credit is an important component in helping you find the best loan product to meet your home-buying needs. The way you handle credit obligations can greatly affect your loan choices and the interest rates you can get. In short, the better your credit, the more loan options you will have when choosing what’s best for you and your financial goals.
If you're in the market to buy a home, and you want to make sure you're doing everything you can to maintain good credit, here are a few tips:
- DO pay what you owe – regularly and on time.
- DON'T skip payments.
- DO have a checking and a savings account.
- DON'T hold more than four credit cards.
- DO sign up for automatic payroll deposit with your employer.
- DO keep your total debt-to-income ratio under 36 percent.
- DON'T exceed or continually increase your line of credit.
- DO keep track of your spending and stay within your budget.
- DON’T continually open and close accounts; maintain a constant profile.
Your lender will view your credit report when determining which loan products are best for you. Using your credit history, the credit bureau will develop a credit score. The higher your credit score, the more likely you are to qualify for a loan with the best interest rates and product features.
Not sure where you stand?
It's wise to obtain a copy of your credit report at least once a year in order to find your
FICO score. You can obtain your report for free once a year from each of the three major credit bureaus at www.annualcreditreport.com. It’s especially important to figure your score before making a large purchase, like a house or a car, in order to review for accuracy and find out how you can work on improving it, if necessary. In that report, you'll see the consumer credit given to you over the past seven years and be able to check your highest balance and current balance on outstanding debt, as well as see details about on-time and late payments and collections. Your home mortgage consultant should be able to help you better understand what your score means.
You can get your credit report from many sources, but should you find something in your report that may be inaccurate, only the credit agencies can actually correct the data on your report. Contact the three major credit agencies directly:
Equifax: (800) 685-1111 or www.equifax.com
Experian: (888) 397-3742 or www.experian.com
TransUnion: (800) 916-8800 or www.transunion.com
As for less-than-perfect credit, you should know that lenders typically are more concerned with how you’ve handled your recent credit than with what happened years ago. But even if you have a blemish on your credit history, don't let that stop you from buying a home. Buying a home – and paying your mortgage on time each month – is a great way to rebuild your credit.
For this and more information call your Dallas Realtor Lisa Von Domek, and visit www.LisaSellsTexas.com!
BROKER/ASSOCIATE/REALTOR, ABR, AHWD, ALHS, ASP, BPOR, CAPS, CDPE, CGP,
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Hello Lisa
Credit scores are very-very important when purchasing a home, along with a good paying job and some great information on your post.
Great article and awesome tips. Credit scores are essential for clients looking to purchase or lease. Preparation is key to a successful transaction when the time to act arrives.
Lisa,
Great post on a subject I don't often see here in AR. Clear, full of information and good action. Thanks!
I love that there are things out there like credit karma and even discovercard that let you view your score on a regular basis. My daughter has enjoyed watching hers easing up to excellent from very good as she added a mortgage and has been making those payments on time. For young competive people that app has been helpful to them getting and keeping good scores.
Excellent FICA tips Lisa, you have the power to make your score what it is today.
Lisa but if I am in charge who can I blame? Seriously awesome advice, sadly many will not listen, Endre
Hi Lisa - I know lots of people are surprised about some of the seemingly innocent things.
Sometime I will write about the credit score that would not go down....a strange request...but not for people doing a short sale.
Good morning Lisa. More people should pay attention to their credit score! Enjoy your day!
Good morning Lisa. This is so important for everyone and you have done a great job stating the facts.
This is excellent advice to share.
Have a wonderful weekend.
We have a cool and rainy Saturday morning in Maryland.
Lisa being able to make purchases these days seems to revolve around having good credit, so making sure our credit scores are as high as possible is extremely important.
Hi Lisa Von Domek , There are so many clients who take the easy way out, ruining their credit.
These are wonderful tips and rules to live by Lisa! You've done a great job on this blog post! I'm a believer that people should keep good credit and know how to manage money too.
This is a great post and I think I am going to post it to my Facebook as I have had many ask me these type of questions lately. Great Job!
Hi Lisa
There's some great information here for consumers, many of whom are not really familiar with how their credit scores are determined, what can impact them or even that there might be errors.
Jeff
Hi Lisa Von Domek this is a topic that needs frequent discussion.... so many just don't understand the seriousness of damaging their credit...just saw the reblog on Sussie Sutton 's blog....
Earning money and making it work for you goes hand-in-hand, right Robert Vegas Bob Swetz ?!!
I agree Les & Sarah Oswald preparation is key...and execution is a must!
Thank you Carol Wilson I am so pleased you liked this post!
Tammy Lankford, so many great tools available for consumers to use to keep their credit working for them...instead of against them.
Absolutely Noah Seidenberg everyone is in charge of their credit and make it work for them, or against them.
You made me smile Endre Barath, Jr. who can anyone blame
Hard to fathom the surprise, isn't it Grant Schneider ?