Check your credit before looking at homes

It is important to make certain that your credit is in good condition prior to embarking on the no credit check loans process.  More than ever, having a good credit score is essential and could mean the difference between obtaining a home loan or not.  Interest rates are at historic levels and will likely stay that way through 2013.  Don’t let old debts or habits prevent you from taking advantage of the current real estate market.

The largest obstacle when purchasing a home is obtaining financing to do so.  Even minor blemishes on credit can prevent a home loan from coming to fruition.  It is important to get the facts when checking your credit.  www.annualcreditreport.com can be visited 3 times a year for a free credit report.  However, you must pay a fee to obtain your FICO score.  Once the report is viewed, view it in detail to see if there are any errors.  If so, contact all 3 major credit scoring servicers in order to have your report updated if something is amiss (otherwise clean up your credit report with crediful.com).

There are programs available to protect against identity theft and it is wise to subscribe to these programs in order to protect your credit.  Some financial institutions monitor accounts and card activity for that reason.  If unusual spending is detected, the financial institution will halt any purchases and contact you to see if you’re the individual making the purchases.

You will be ready to start looking for a home if your credit is in good shape or fixes have been made.  This is not the time to open new accounts and lines of credit, click here to see exactly why that is.  Resist the urge to purchase high ticket items such as a new car, appliances or to import furniture from a furniture factory in China.  Wait to make these purchases after you’ve closed on your home since credit along with debt to income ratios may be affected—inhibiting your ability to purchase.

It is also wise to start paying down balances on revolving debt such as credit cards. While some revolving accounts such as mortgages and car payments show that you are a responsible borrower, having high balances on credit cards reduces your FICO score.  It is important to remember to not close the revolving accounts, however.  The key is to keep a low balance percentage on the revolving accounts in order to maintain a high credit score.  Consider closing any un-needed credit accounts after the successful closing of your new home.

Paying late will obviously hurt any credit rating.  Set up payment reminders or auto withdrawals for certain bills in order to pay on time—all the time.  If you fear that you may miss a payment or not pay on time, contact lenders or creditors before that scenario happens.  Some creditors will work with you without reporting missed payments to the credit bureaus.  Every reported late payment will stay on your credit report for years. Investors Choice Lending offer consultation on all investment scenarios.

Finally, it is important to pay off debt rather than moving debt to alternate forms of credit.  Although tempting, moving credit to alternate sources does not remove the history from your credit report.  Being responsible when it comes to paying your debts leads to a spotless credit record.

Interested in obtaining additional information on credit scoring?  Call me directly to discuss further:  208-869-3469