Credit score tips for home buyers
Your credit score is key in helping you secure a mortgage loan at a favorable rate, and how you handle your credit prior to buying a home matters. Securing a lower interest rate now can translate into saving thousands during the life of your mortgage.
Keep in mind these tips to improve and maintain a strong credit score:
Review your credit report. Obtain a copy of your credit report and check for errors or discrepancies. Work to clear up any issues prior to applying for a loan. For more information on how to order your credit report, visit the Federal Trade Commission website.
Reduce credit card debt. Make an effort to significantly reduce or eliminate your credit card debt. Your goal should be to reach a point where you can pay off the full balance each month.
It is also important not to charge to your maximum credit limit, and don’t sign up for new credit cards before shopping for a mortgage loan.
Put off large purchases that require financing. Between the time you apply for a loan and close on your new home, be sure not to add any additional loans or financing. Buying a new car or financing furniture can negatively impact you.
Be realistic and patient. If you have had problems paying bills on time, make every effort to catch up and maintain on-time payments as soon as possible. If you have any such credit issues on your credit report, it is often a good idea to wait a year before applying for a home loan.
If you would like to learn more about how to improve your credit score to buy a home, contact us using the form below. We have nearly 30 years of real estate experience that we will put to work for you.