Thinking about buying soon? Make sure your credit is in order
There’s no more important time to work on your credit score than when you’re about to apply for a mortgage. Improving your credit can save you a ton of money—we’re talking about thousands of dollars over the life of the loan. Here are the actions you can take that will have a notable impact on your score.
Pay down your credit card balancesCredit utilization is one of the biggest factors in determining your credit score. Your credit utilization should at least be less than 30 percent of your limit, and it’s even better if you can get it below 15 percent. This rule applies to both individual cards and your overall credit limit.
It may even be worthwhile to use some of the cash funds you were planning to use for a down payment to pay off credit card balances.
Do no harmWhile you certainly want to improve your score if possible, at the very least you’ll want to keep it steady. Avoid opening new lines of credit if you’re applying for a mortgage in the very near future. This will cause a hard inquiry to show up on your credit report.
Take care of negative itemsIt’s good practice to check your credit report for negative items a few times a year—you can get one free report from each of the three major bureaus (Experian, Equifax, and TransUnion) per year.
If you find any negative items (collections, late payments, etc.), write a letter to the original creditor. Explain the circumstances that led to the negative item, and request that it be removed from your report. It can be surprisingly effective, and removing a negative item will improve your credit score in a hurry. You can find some good templates for a request letter online.
Author:Lynda Western Phone: 602-919-0857 Dated: January 2nd 2017 Views: 278 About Lynda: A family oriented person, Lynda has a passion for helping people in unfortunate situations. An Ariz...
The partners of Re/Max Preferred Choice specialize in both the purchase and sale of residential and commercial real estate, as well as providing property management services. We have been in business since 1996 and have a long history of providing exceptional customer service to our agents.
One of the first decisions that must be made in the home buying p
"Justin Schlegel is the absolute best Realtor® you could ever work with. We wanted a retirement home in Arizona, but had no idea where. Justin showed us multiple locations from Phoenix suburbs to Tucson. When we decided to build a new home, Justin was exceptionally helpful throughout the process. We lived in Nebraska, so Justin went to home inspections and even picked out our granite slabs, on our behalf. Justin sent us pictures of the home in various stages of the building process too. Justin met us at our walk-thru and attended our closing with us. We can't say enough good things about how Justin made this whole process so enjoyable for us. He was there for us every step of the way. Every phone call, email, text and phone call was responded to very timely and professionally. We will forever be grateful to Justin for helping us select what we think is the perfect retirement home for us.
Rex & Cathy in Queen Creek, on behalf of Justin Schlegel