Planning out a strategy for obtaining a home can get you the finest property tax rates, low loan interest rates and you can still put down a deposit to make your payment sensible. This is the main reason why many families wait until the right time to make an offer on their dream home. Your credit score is another reason you should wait a little while before buying a home. Many real estate customers do researches on how they can reduce their debt and increase their credit score before finding a home because they know how much can be kept aside. There are 5 vital changes you can make to your credit to make home ownership more worthwhile and enjoyable.
1. Shun applying for new lines of credit.
You will start getting attractive new offer for credit cards being sent to your home once your credit score starts rising up. Avoid getting credit cards with better credit lines before you expect to buy a home. Inquiring from you credit card issuers for a reduction or an interest rate will help you reduce their balances.
Pay down all your dues.
If you have multiple debts, start by paying those with bigger dollar values. You will end up with more money saved and your credit will go up.
3. Refinance your students and car loans.
To make the total amount that is due to your loans a lower rate by repaying all the auto and student loans. Your credit report will be updated rapidly to show that you are on your way to satisfy all remaining student loans.
Remove Past Due Collections
If you have any type of judgment, outstanding collection or past due accounts can stop you from getting your mortgage application approved. Despite the value of the account being minimal, mortgage providers shy away to provide people who have defaulted from past agreements with more money. This is the reason why you should ensure that all past due accounts are well taken care of including any that has already gone into collection before you apply for a loan. Having a history of making late payments on your credit rating can make it more difficult for you to acquire a loan, but if you eliminate the collection accounts, your plans of owning the home of your dreams can become a reality.
5. All Errors Should Be Corrected
Although you may think that if you had a wrong past statement on your file won’t hurt you, remember that mortgage lenders always look at all pieces of information so that they can build their clients profiles. You don’t know who you will be accidentally linked to if you provide wrong information, therefore, ensure that you provide past employers and addresses. There may be someone with a similar name to yours but who has a worse credit score, and you don’t want to be mistaken for such people.
You can improve your credit score rating by following several ways and still be able to get a mortgage pre-approval. By making all the changes that are stated above, you just need to wait for a few months and you’ll observe a change in your credit score rating.