If you have ever wondered aboutbuilding a credit score read this!
There are so many excellent articles on Active Rain to do with purchasing or selling a home. So many subjects get covered. One of my favourite writers is Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi who writes about mortgages and credit. His articles are so informative and useful regardless of where you live in the country. This one is well worth a read if you are trying to re-build credit or even establish credit in the first place. I sent this to a young man who recently asked me what steps he needs to take to purchase a home, he has always used debit cards and never had a credit card. This article lays it all out for him. A worthy read.
Do You Have Plans for the Weekend?Those Plans Should Include Checking Your Credit
Another weekend is just around the corner ... do you have plans?
Silly question, I know. But even if you already have a boatload of activities on your calendar, carve out enough time to add one more important activity.
Check your credit and credit scores!
It only takes a couple of minutes to request your free Credit Report on annualcreditreport.com. You fill out a simple form and "viola"! It's really pretty easy peasy.
While this one simple act is accomplished quickly and easily, it's well worth doing as it reaps you long-term benefits. So once your busy weekend is behind you and you have a bit of downtime, make sure to take that time to sift through the valuable information received within your free report.
Take special note of this information:
1. Your personal info, Social Security Numbers, Date of Birth, Full EXACT Name, and Address2. Your credit rating
3. ALL your credit accounts. Are they being reported?
4. Are any late/missed payments showing? If so, what is the true status of these accounts?
But ... what if you're someone that has NO credit lines or little credit being reported? What if you wish to establish credit and credit history? What then?There are some simple steps you can take to accomplish that. Those are:
Major retailers and gasoline companies are two (2) good examples of this type of debt. (Make sure prior to taking out new credit or initiating a new credit card, that the company utilized reports to the Credit Bureaus)
- Open up a Credit Card (known as revolving debt) with a modest borrowing limit.
- Use the newly-established credit card by charging purchases within your budget constraints. Pay the balance on time and in full each month.I recommend that first-time credit users open only one or two credit lines, to begin with. Take small steps. Learn to handle your credit wisely. Crawl before you walk.
- Consider using a co-signer to establish a credit account. Lenders consider the co-signer's credit as existing credit.
Note: Co-signing is not without risk, so consider this action carefully prior to doing it. Also: Make sure the co-signer involved has a long good credit history.
What's a Secured Account? A "secured" account" is one where a deposit of cash (such as $250, $500, $1,000) is made with the credit company, as collateral for a credit card. When establishing this type of card, you essentially "pledge" an amount ($500 - $1,000), then repay the bank or credit company over 12 regular installments to pay that amount off.
- Open a "secured" account" with a credit union or credit card company or other company that allows it. The bank where you keep your savings and checking account is typically a great option.Of Note: Secured Accounts can also be very helpful for those that suffered through a Bankruptcy or Foreclosure or had other credit issues in the past.I must point out here ... if you hope to become a home buyer soon or in the future ...As a rule: The establishment of 2 (sometimes 3) forms of trade-line/credit such as Revolving and Student Loans will be needed prior to applying for Mortgage.Underwriters and Mortgage Lenders will ask that you:
- Provide concrete evidence proving that you have the current ability to make payments on the Mortgage for which you are applying.
- Provide proof in the form of a Credit Report that you have a "documentable history" of honoring your credit obligations. Timing is everything in this regards.
Take these steps to establish credit cards and credit history well in advance of applying for a Mortgage, as it can take up to 6 months of payment history to build a credit score or improve existing ones. Lenders need a significant credit "storyline" to follow during your Underwriting Process.And remember, once your credit has been established, all credit card balances should be maintained well below the Maximum Credit Limit. (30% is optimum. 50% maximum, including finance charges.) Most importantly ... make all your payments on time!Act proactively regarding this issue if you hope to buy. Reach out to me as soon as you make your home buying decision. The info and assistance garnered will prove extremely beneficial at the time of your purchase/mortgage application and save you money.Whether renter, future home buyer, or just beginning your credit story ... it's important that you review your credit and credit scores, at minimum, once per year. There'll be no better time than now, this weekend ...
* Hoping to establish good credit? Have credit questions?Or are you dreaming of buying or refinancing a home or Investment Property in New Lenox - Will County - Chicagoland - IL/WI?Contact me today! I'll put my 40 years of mortgage experience and expertise to work on your behalf.I'm easily found at:
Mortgage Originator - NMLS #216987
IL Lic. #031.0006220 - WI License #216987
Gene Mundt, Mortgage Originator, 40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking: #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including: The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin.
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