Get Your Credit Back On Track So You Can Buy A Home

The holidays are over and the credit card bills have been rolling in. Now is the time to get your credit back on track so you can prepare to buy a home.

Is Credit Score Important?

Yes! Your credit score and credit report will be viewed by the lender before you are able to obtain a mortgage. If your credit score is very poor the lender will decide you are too risky and you will not be able to get a mortgage. With a moderate credit score you will be offered a mortgage but the terms will not be ideal. Therefore maintaining a good credit score puts you in the best position to get good mortgage rates.

Steps to Take

If your credit score has been impacted by your holiday spending you can take steps to make improvements. Consider the following:

  • First, check your credit report. If you don’t know your credit score or it doesn’t seem like it reflects what you expect, you should check the report. Many financial institutions suggest that the report should be checked once a year. Look for errors or identity theft. Contact the National Credit Reporting Bureau if you find issues.
  • The credit card company provides you a credit limit. It is not wise to spend to this limit however. Instead keep your purchases well under the limit so you do not appear to be a heavy user of credit.
  • Make payments on time! Your credit score is lowered when the payments are delinquent.
  • Pay as much as you can. Ideally you would pay off your card each month. If that is not possible pay as much as possible to reduce your balance.

Lenders study your credit score and credit report to verify that you will be able to pay your mortgage on time each month. They use the report to determine your credit history and if you are worthy of a loan. Taking your credit score seriously is important.  Contact us to learn more about being a first time home buyer.

Listing information is deemed reliable, but not guaranteed. This IDX solution is (c) Diverse Solutions 2013.
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