Do you know what actions could help improve your credit score? Do you know what your credit score is, the number? Do you know how easily some of those actions are performed and how quickly they take effect? A recent survey from TransUnion indicates that an overwhelming majority of those planning on or considering buying a home in the next 12 to 18 months have little to no idea. This same survey found that while nearly three out of four (74 percent) of potential homebuyers believe it’s important to check the accuracy of their credit report, less than 45 percent correctly understand that their credit score measures the following:
• The amount of debt they hold
• The risk of not repaying a loan
• The financial resources they have to pay back loans “As many people across the nation prepare to take advantage of still-low interest rates and look to buy a home, it’s essential they understand their credit score before applying for a home loan,” said Ken Chaplin, senior vice president at TransUnion. Here are some other interesting statistics that came out of the survey from TransUnion – although the majority of consumers recognize the importance of a credit score:
• 33 percent incorrectly thought increasing their income has the potential to help improve their credit score
• 28 percent incorrectly thought closing old accounts had the same potential
Here is what I recommend, call a local lender. As part of the buying process one of the first things any buyer should do is get pre-approved with a local lender. A good local lender will not only show you where you are at, review your credit scores, but share things you can do to increase those scores so that home ownership is part of your future. Knowledge is power, free knowledge is priceless.
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