Planning to buy a home? 5 vital changes you need to make to your credit.
Planning out a strategy for obtaining a home can get you the finest property tax rates, low loan interest rates and you can still put down a deposit to make your payment sensible. Because of this, many people prefer to wait for the perfect time before making a decision on their dream house. 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. To make home ownership more pleasant and rewarding, there are five critical modifications that you can make to your credit.
1. Shun applying for new lines of credit.
New attractive offers on credit cards are likely to be sent to your home when your credit score begins to rise up. Avoid getting credit cards with better credit lines before you expect to buy a home. To reduce the balances, you should ask your credit card issuers for a reduction or other benefits or an interest rate.
Pay down all your dues.
It is advisable to start by paying the debts with the largest dollar value if you have multiple loans. Your credit will go up and you will save more money.
3. Refinance your students and car loans.
To make the total amount that is due to your loans a lower rate by repaying all the auto and student loans. To show that you are well on your way to satisfy all unpaid students loan, you credits report will be updated.
Remove Past Due Collections
In case you have a past due account, an outstanding collection, or a judgment, this can hinder you from getting loan. 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. That is why you should be cautious and ensure that you have taken care of all past due accounts even those that have already gone under collection before applying for a mortgage. In case you have a history of a late loan repayment on your credit score, then getting a mortgage can become a bit difficult, but when you remove all the collection accounts you can make your dreams of owning a home come to a reality.
5. Ensure All Errors are Corrected.
If at one time you had indicated a wrong address in your profile, don’t think that you are safe, mortgage providers will check every information before they create your profile. You don’t know who you will be accidentally linked to if you provide wrong information, therefore, ensure that you provide past employers and addresses. 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.
The ways to improve your credit score and qualify you to get a home loan application approval are more than one. 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