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Planning to buy a home? 5 vital changes you need to make to your credit.
You can get the best property tax rate, low mortgage interest rates and on the other hand put down a down payment huge enough to make your payments more than reasonable when you take enough time to plan out your strategy for purchasing a home. This is the main reason why many families wait until the right time to make an offer on their dream home. Your credit score is another reason you should wait a little while before buying a home. Before locating a great home, many real estate shoppers do searches on how to increase your credit scores by reducing debt simply because they know how much can be saved. You can make these vital changes to your credit to get an enjoyable and gratifying home ownership experience.
1. Do not apply for new credit lines.
As soon as your credit score goes up, you are likely to get new and attractive offers for credit cards being sent to your home. The time before you expect to buy a home is a dangerous one, so don’t take the offers on the credit cards. Inquiring from you credit card issuers for a reduction or an interest rate will help you reduce their balances.
Pay down all your dues.
Individuals with several debts should first repay the ones with the biggest dollar value. More money will be saved hence your credit history will start going up.
3. Refinance your students and car loans.
To make the total amount that is due to your loans a lower rate by repaying all the auto and student loans. To show that you are well on your way to satisfy all unpaid students loan, you credits report will be updated.
Eliminate any Past Due Collections.
In case you have a past due account, an outstanding collection, or a judgment, this can hinder you from getting loan. Despite the value of the account being minimal, mortgage providers shy away to provide people who have defaulted from past agreements with more money. This is the reason why you should ensure that all past due accounts are well taken care of including any that has already gone into collection before you apply for a loan. Having a history of late loan payment can impact your credit score negatively and make it difficult to get a home loan, but if you take care of the collection accounts early you will be able to own the home of your dreams.
5. All Errors Should Be Corrected
Although you may think that if you had a wrong past statement on your file won’t hurt you, remember that mortgage lenders always look at all pieces of information so that they can build their clients profiles. By providing inaccurate information, you won’t know who you’ll be linked to, therefore, provide accurate information about your employers and address. There may be someone with a similar name to yours but who has a worse credit score, and you don’t want to be mistaken for such people.
You can improve your credit score rating by following several ways and still be able to get a mortgage pre-approval. By making all the changes that are stated above, you just need to wait for a few months and you’ll observe a change in your credit score rating.