5 important changes to make to your credit before purchasing a house.
You can get the best property tax rate, low mortgage interest rates and on the other hand put down a down payment huge enough to make your payments more than reasonable when you take enough time to plan out your strategy for purchasing a home. This explains why many people wait until the right time prior to making an offer on the home of their dreams. There is another reason for waiting until the perfect time to buy your home, and that is your credit score history. Many real estate customers do researches on how they can reduce their debt and increase their credit score before finding a home because they know how much can be kept aside. There are 5 vital changes you can make to your credit to make home ownership more worthwhile and enjoyable.
1. Shun applying for new lines of credit.
As soon as your credit score goes up, you are likely to get new and attractive offers for credit cards being sent to your home. Avoid getting credit cards with better credit lines before you expect to buy a home. Inquiring from you credit card issuers for a reduction or an interest rate will help you reduce their balances.
Pay down all your dues.
If you have multiple debts, start by paying those with bigger dollar values. You will end up with more money saved and your credit will go up.
3. Pay down your auto and student loan.
To make the total amount that is due to your loans a lower rate by repaying all the auto and student loans. Your credit report will be updated rapidly to show that you are on your way to satisfy all remaining student loans.
4. Remove Outstanding Collections.
When you have any type of judgment, a past due account or an outstanding collection, then you have minimal chances of having your mortgage application approved. Regardless of whether the account in question has a small value, lenders are unwilling to issue funds to people who have had a hard time to honor past agreements. This is the reason why you should ensure that all past due accounts are well taken care of including any that has already gone into collection before you apply for a loan. Having a history of making late payments on your credit rating can make it more difficult for you to acquire a loan, but if you eliminate the collection accounts, your plans of owning the home of your dreams can become a reality.
5. All Errors Should Be Corrected
In case you had a wrong address in your credit file, you may think that you won’t get hurt, however, financiers check every detail to ensure that they build a profile for each of their clients. By providing inaccurate information, you won’t know who you’ll be linked to, therefore, provide accurate information about your employers and address. It is likely that there is a person with a name like yours but who has a poor credit score than yours, you wouldn’t want to be mistaken for the same person.
There are several ways that you can follow to improve your credit rating and qualify for a home loan. If you follow the above steps, you will only need to wait for a few months before you witness a change in your credit score