Do You have a Game Plan for Owning a home?
Are you planning for that dream home? Now is the time to fix any errors on your credit report. Review your credit report, and you can receive one by clicking here. There may be an error reported by a creditor, or you could be a victim of identity theft and not know it. If there are any problems, you want to know now. Some discrepancies can take a few months to fix. The faster you fix the errors on your credit report, the better.
Here are a few things you can do to raise your credit score Fast:
Decide 6 – 24 months before, whether you need any more credit cards. Lenders like to see about five active trade accounts. Trade accounts would be things like credit cards or an existing car loan.
It is not a good idea to purchase a new car a few months before trying to get a home loan. In some instances, people have been turned down for a mortgage because they bought a new car a few months before applying for a loan. The reason for this is that doing this raises the amount of debt load a person has. An existing car loan paid on time for the past three years is different because the debt has been paid down and good payment history is reflected in the credit report.
If you have more than ten trade accounts, you may want to hold off on opening any new accounts. So the next time the department store asks you if you would like to save a 10% today’s purchases by applying for their credit card just say no.
The next step:
After applying for any needed credit stop having your credit report pulled. Too many inquiries will lower your credit score fast. Credit reports you request for yourself do not count as inquiries. Use no more than forty percent of your available credit lines. Lenders want to see that you handle credit responsibly and that you won’t overextend yourself. If you have large balances, try to see if there is any way you can pay these balances down now. The less owed, the better.
In the past, the best situation to be in was to have all your debt completely at zero. Lenders are more forgiving these days, but less is best. Six months before you plan to have lenders review your credit report reduce a number of charges made. It is still good to have activity because positive on time history is being recorded on the credit report. Do not purchase a new car or open any new lines of credit at this stage. Also, six months before, look for a loan officer. They can make additional suggestions to what you can do to improve your chances for the best rate with the lenders that they work with.
Once you have moved in you can start opening new lines of credit if you need it. Don’t buy new furniture for your home on credit until the closing is done. Until you, they hand you the keys it not safe to apply for credit.
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