How To Handle The Holidays Like A ProDecember. It comes in hot and goes out in a flash. The holiday season is one where most people are filled with ‘holly-jolly’ and a gift-giving spirt. But
How To Improve Your Credit For A Home Loan
How to Improve Your Credit for a Home Loan
A credit score is a measurement of your creditworthiness, and is used to calculate the terms and rate of a mortgage if you need to borrow money when purchasing a new home. Credit scores play a big role in determining whether you’ll even be qualified for a loan at all.
According to BankRate, the lowest interest rates go to borrowers with scores between 760 and 850. Those with poor credit - with a score of 620 or lower, are considered ‘subprime borrowers’, meaning they face the highest interest rates and fewer options.
However, if your score is low there is light at the end of the tunnel. We’ve gathered some of the most important factors needed to improve your credit score.
Check your credit report. Did you know that you no longer have to pay someone to check your credit report? Thanks to an act of Congress, you are now able to download one credit report each year for free, by visiting annualcreditreport.com. You should do this consistently and look through the information carefully, to ensure there are no errors. If you find any, contact them immediately!
Be credit card conscious. For most of us, credit cards are a necessity these days. Not only to get us through the downtimes, but also to pay many bills and retailers online. Be sure to pay off your credit cards bills every month. If you can’t pay off the entire balance, pay off as much as you can or atleast the minimum payments by the due date specified. Credit cards are not free money. They come with big terms and large penalties if not used responsibly. Opening several accounts can lower your credit score and hinder your mortgage application.
Seek multiple options from the same lender. Let’s be clear. We said shop from the SAME lender. Having too many credit applications from various lenders can lower your score. However, multiple inquiries about your credit score from the same type of lender are counted as one, if completed at the same time. Don’t be afraid to see what your options are upfront.
Wait to apply for a mortgage. If you’re working on improving your credit score, give it a year before you apply for a mortgage. After 12 consecutive months of good credit, your score will increase and you will be penalized less severely by the lenders.