Build Your Credit Score NOW if you Plan to Buy a Home — Part 1
This is the first post in a two blog series. For more details, visit: Part 2.
In 2004, Bob and I bought our home in Arlington, VA. It seems strange now to call that “back in the day,” since it was only six years ago. But since our investment, the markets, economy, and industry trends has changed so drastically, it seems like a long time ago! Life was simpler then, and it was much easier to get a loan approval to buy a home.
How things changed! For some, buying a house today is a nightmare. Your earnings quotient could determine whether you CAN buy a home or NOT. A good credit history can help you negotiate a better interest rate and sometimes even lower your down payment. If you lack a credit history, banks and lenders are wary about extending you a loan. Why? It’s difficult to tell whether you will make a responsible mortgage payer or a risk.
But not all is lost! You can work your way to building on your creditworthiness through a stable credit score. Here’s how you could begin, what you should know, along with a few ‘dos’ and ‘don’ts’ to add to the mix:
- What’s your Credit Score?
As basic as it sounds, fixing your credit score is possible only once you know where you stand. A lot of people presume that they have a bad score. A helpful hint – delaying payments by a couple days doesn’t always affect your score. What ruins it is when you’ve deferred paying over 30 days. Having said that, paying on time adds more stability to your score. Getting a copy of your most recent credit report can help you strategize your financial plan accordingly.
- Have good Banking Habits?
Creating and maintaining a sound checking and savings account could take you a long way in building creditworthiness. You bank account is the first place that lenders would look at to understand your financial stability and your spending habits.
- What affects your Credit Score?
It takes way more time to build on your credit score than to crash it beyond comfort. You know better than that! So constantly keep three things in mind:
a) Always always always pay your bills on time. If you find it difficult to remember the due dates, set reminders and automatic payments in place to ensure you pay on time.
b) Don’t max out your credit limit every month. Try and maintain your credit usage to about 10% – 30% of the upper limit. This doesn’t just help you maintain a good score but also dodges the debt trap.
c) Pay your credit card in full. This is self explanatory – don’t let the credit spill over to the next month.
Thinking of buying a home? Not sure if you can afford one now? Express Realty Services is here to help you. With an in-house lender in place, we can help you go through the pre-approval process for no extra charge. Besides, we sell more than 30 homes a month, catering to a wide range of budgets. So we’re sure we can find one home that’s just perfect for you.
Just pick up the phone and call us at 1-888-306-9450 or visit our website.
To find more tips, visit: Part 2
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Tags: banking habits, build credit score, buy a home credit score, credit history, credit limit, credit repair, credit score, creditworthiness, pre approval credit, pre approval process