How to Fix Your Credit to Buy a Home - You should view your credit report, before you start shopping for a home. The last thing you want is to be turned down for a mortgage, because you have poor credit, and many sellers will ask you what your credit rating is.
A credit report is a seven year, month to month report on all your credit transactions. Ideally, you would have made at least the minimum of every payment each month, and have low revolving balances.
The longer you credit history, the higher your score. Even a perfect short credit report, can have a very low score. Lenders like to see that you don't have too many credit accounts open, and that you use your credit wisely.
Since a mortgage is a huge amount of money, lenders are very strict with whom they borrow to.
There are things you can do to help repair your credit if you have some time before you actually apply for a mortgage. The easiest thing to do is, stop applying for more credit accounts, including credit cards, lines of credit, and department store charge cards.
Applying for credit, hurts your overall credit rating. Lower your revolving debt ratio, you should not be maxing out your credit cards every month. Show that you carry a very low balance, and that you are no where near your credit limit.
This can be very difficult for people that are revolving on a large amounts of debt. The best thing to do is consolidate your debt, so that you are paying less interest, and or, ask for a lower interest rate from your creditor. Make sure that you always make your payment each month, even if its the minimum payment.
A credit report will usually include a FICO score, which is a number that rates your overall credit. The higher the score, the better. Scores range from 350-850, average is around 600.
Ideally, if you want the lowest possible interest rate, you want your score around 700 or higher. Anything lower than 600 will hurt your chances of getting approved for a mortgage.
Posting Komentar