Credit agencies
One number that makes or breaks your likely hood of getting an affordable loan or even a loan all together is the credit score. A four letter word to most people, the credit score, has a direct impact on most major financial decisions you make. Possibly the largest would be the home loan.
A brief summary of the scoring system; it was developed to be able to rate an individual’s level of financial responsibility. How they determine it is by looking at the person’s financial history in paying bills and paying them on time, as well as the lifetime of the various debts that the individual had. A better credit score means that the individual paid bills on time and never went to deep into debt. While a worse credit score usually equals that a person didn’t pay their bills on time or at all. The score is between 300 and 850, the higher the score, the better.
How does this affect new home buyers? Well, if you have a poor credit score you will either get loan with a higher interest rate, or won’t get a loan at all. On the flip side, if you have stellar credit, loan officers will kiss your feet just to get you to sign with their bank. Credit score is almost everything when it comes to personal finance. But don’t let it deter you if your credit is lacking.
If you have bad credit, but are in the market to buy a home and have the means to do so, then there are several things you can do to boost your credit up. First, check your credit score for errors by inquiring about it from annualcreditreport. Here you can look at your credit score for free and see if there are any problems that shouldn’t be there. From there, all other major steps to improve credit will take a little more time but well worth it.
If you can foresee purchasing a home in the next year, why not build your credit at the same time? The easiest way is to make on time payments to all current bills. If you have a lack of credit, acquire a credit card from one of the major credit card organizations. Use the card on a regular basis while making on time payments to it. The key here is to have stability and responsibility when it comes to borrowing money. By doing these things for a year before applying for that home loan you can vastly improve your credit score.
Remember that a home loan is a major financial decision and a couple percentage points on your loan can equal thousands of dollars over the life of the loan. Take your time when making this decision. If you have bad credit at the time, have the patience and diligence to change that before applying for a loan, it will really help you in the long run. The bottom line is that you can turn your credit score from a nightmare to something that works for you by doing a few small changes in your life, and realize that the reward could be your very own home that you are proud to own.
~By Brandon Fenstermaker~
nice share
Has anyone heard any clarification about how the new financial reform bill is going to affect mortgage lenders?
in this times of economic recession, sometimes it is difficult to have a great credit score`~`