Let’s Clean up your credit score before buying!, by Jenny Gonzalez.

Let’s Clean up your credit score before buying!

By Jenny Gonzalez

Acredit score developed by Fair Isaac Corporation is a model that shows the customer’s creditworthiness. It is a number between 300 and 850. In buying homes and other mega purchases requiring one to take a loan, it is important to clear credit scores first. It is important to do so because it will lead potential lenders to trust the borrower and benefit from lower interest rates in the long run. Credit scores between 800-850 mean excellent, while 300 -579 mean poor credit scores. The numerical analysis is also crucial as it determines the amount of deposit needed to take a loan from creditors. It is easy for buyers to fall in love with the idea of buying a home, but if their credit score is bad, that will remain a dream. Credit score has significant effects when it comes to getting home. Research indicates that those planning well for their home buying processes are less likely to run into financial debt later. It is crucial to check on credit reports, which is done by revising them after a certain period. Credit reports are freely downloaded or can also be gotten via phone. Equifax, Experian, and Transunion are the three main companies that give credit reports, but each company has different reports. Once one gets their report, checking for mistakes is vital. Errors could result from a misspelling of the names or wrong personal data. Fraud is another reason one needs to check on a credit report because there are; possibilities of

When checking on accredit reports, one is advised to check if the one s name is written correctly, the address of the place of residence, and employers’ details. It is also advisable to check on an account that is unfamiliar, closed but still functional, and has incorrect negative account data. If one notices an error, one should report for changes to be made. Making changes on the account is procedural as it involves calling both the credit company and the company that gave incorrect data. One is then supposed to have proper documentation fighting against this. Note that there is information that is negative but true and also information that is negative and untrue. Only untrue information can be changed after the justification of the information. Credit scores are got from several credit reports, and different lenders have different methods of checking for the scores.

I want us to reach out to these buyers that have lost hope and offer them practical ways of improving their credit scores. A step by step approach that they can follow to improve their credit scores. Improving a low credit score is possible by applying certain strategies, such as applying for short loans to be paid after 45 days and ensuring one completes the application within the specified time. People are also advised not to be co-signers because the act interferes with credit reports, and in case one credit cannot handle responsibility leads to serious problems. People are encouraged to keep credit cards open when the balance is paid off. Elimination of credit cards lowers the score, adversely affecting a person when taking loans. People are advised to seek counsel from trusted lenders and talk about credit weakness and what to do to reduce the issue. It is also good to note that the minimum credit score depends on a loan program.

A borrower with a credit score that is less than 600 generally pays the highest rates and is limited with loans. People with poor credit scores who want to buy a mortgage are advised to consult a non-profit credit counsellor to explore various loan options or visit a HUD-approved housing counsellor to help improve credit scores. People are warned against some fraudsters that trick those with low credit scores so that they can remove bad credit scores and any negative information. The only way to improve low credit scores is by working hard to rebuild the credit scores.

When buying a home, people are advised not to get more money than they need. It is because more money lowers credit scores in the long run. Remember also that it is the right of every individual to get the best mortgage worth the money they have.

Credit rating is affected by several factors. First, payment history is key to checking if the bills are paid on time. Credit utilization indicates the statement balance and the amount of credit available to a person. Also, the credit score is affected by the length of credit history and recent credit.

Lenders look for employment history, credit inquiries, outstanding dept, ability to manage debts, and public records to determine how to loan an individual. It is thus important to have a clean record of the above data, which would eventually improve credit score.