Good Credit - A Step Closer To Homeownership!
The key to purchasing your first home is to be prepared. A huge part of the preparation process is to know and understand your credit.
Unless you are paying cash for your first house, you will need to borrow the money to secure the mortgage.Most buyers use the services of a mortgage lender to purchase their first home.
To get good interest rates and terms, you will need a good credit rating or credit score. But in order to have a good credit rating/score you will need to have a credit history. A credit score is used to predict how likely an individual is to repay a loan, it is an indicator.
The best way to find out if you have good credit history is to get a copy of your credit report. You can contact all three bureaus directly or go online.
- Equifax - 1 -800- 685-1111 www.equifax.com
- Experian - 1-888-397-3742 www.experian.com
- Trans Union - 1 -800-916-8800 www.transunion.com
Be sure to review it carefully.
If you have not had good credit in the past, the key is to re-establish your credit. Decide today to take the necessary steps by rebuilding your credit through time and to stay consistent in paying your bills on time.
One excellent way to take control of credit is to use a budget. Think of it as a spending plan, a way to monitor how you spend your money, and how you save some of it. It will help you as you prepare to buy your new home.
Many people think that no credit is as good as good credit. I have had clients in the past that preferred to pay cash for everything. No credit is as bad credit. If you don’t use credit there is no way for the computing system to score your ability to use credit to determine your creditworthiness.
Here are some suggestions to build a good credit history.
- Open a bank account - This is a way to establish financial history. Bank accounts don’t create a credit file, but will demonstrate your ability to handle money. Keep your account balanced, no bounced checks, open a checking and savings account.
- Credit Cards - Revolving, department store or open a secured credit card; with this method you deposit a specific amount into a special account with a credit limit based on the amount that is in the special account. If you have deposited $500.00 in this account, you will have a credit limit of that amount. ( You are borrowing against your own money) The key to re-establishing is to keep the balance to the limit low......use no more than $100.00 a month in charges and pay it off by or before the due date. Although this is not a good financial deal, it is a viable way to establish credit.
- Put your apartment and utilities in your name - this allows you to establish a regular payment history. Recurring bills paid in a timely manner can indicate that you are a good credit risk.
The goal of homeownership may not be easy, but it can be achieved. All things are possible.
Why not make your dream of homeownership a reality!
Contact me today, let’s talk about homeownership