Credit score plays an important part in the home-buying process. Who does not love the idea of being a homeowner, but do you know you need a high credit score for that? So, here are 5 easy tips for first-time buyers to boost their credit score.
The credit score plays an important role in the process of home buying. Who does not love the idea of being a homeowner, but do you know you need a high credit score for that?
Homebuyers often struggle with a credit score, but if you manage to hold a decent score, it will help you save money and make your financial life easier. Getting a decent credit score allows you to get low credit card and loan interest rates, faster rental houses and apartments clearance, and higher insurance rates.
So here are 5 easy tips for first-time buyers to boost your credit score.
We know how much we love pampering ourselves. Who would not go out shopping as soon as their salary is paid? Everywhere, the desire to waste money on random things just follows us. But be careful guys, this urge could make it hard for you to do things.
The credit utilization rate is the amount of money you are spending divided by the amount of credit available to you. Typically, it is expressed as a percent. If you have $50,000 in your account, for example, and your spending is around $25,000, this means that your rate of credit usage is 50 percent. It affects your score negatively if the rate is higher.
But the good thing is, there is no set figure, but it is considered good and represents a healthy impression to hold it below 30 percent. So, begin to save more!
Your credit report is expected to be accurate. There is a detrimental impact of late payments on the credit report. Get them withdrawn if there are any late payments shown on your credit report. The process is a simple one. You should write a letter explaining to your creditor why you paid late, and you can tell him that it's not going to happen again. If he accepts, the late payment will be deleted from your credit report.
Don't be afraid! Getting late payments deleted from your credit report is not illegal. However, y our creditor has to agree to delete the late payment. A creditor does have a right to investigate the payment in 30 days.
If you know someone who has an excellent credit score. The score can be borrowed from them. Isn’t that exciting! What you can do is, be an authorized user on that person's credit card. This means that a particular person will add your name to his account, so now his credit score will be your credit score.
As you know, credit history influences the credit score, so if you are new, you can use someone else's account to give yourself a few years of history. But make sure that the primary account user makes his payments on time, as every missed payment will now also be shown on your report.
It can give your credit score a slight dip if you apply for a new credit card, but for a short period. A "hard inquiry" is required on your credit report when you apply for a new card because the lender would like to see your credit history. Hard research hurts your credit score. Generally, the effect is for a short period.
New accounts tend to lower the average age of the account, and that is not what you want. Therefore, don't launch new accounts too easily.
Unless you keep track of your actions, you'll never know what you're doing wrong. Once a year, the credit reporting bureaus allow a free credit report. It would be a wise habit to check your credit report frequently. That way, you can check the errors regularly and have them removed. The report will also tell you what factor negatively affects your score so that you would have time to improve it.
Remember that a good report means better rates for loans. If you do this regularly, your score will be enough to get you a loan at a good rate by the time you plan to buy a home.
Start using these simple credit boosting tips and your score will be raised in no time! If you have a poor score, there are multiple options for people with poor credit. Don't be disheartened.
Nearby Homes And Property Value Relation
When you are searching for a home, one of the biggest indicators of a home’s value is neighborhood. A bad neighbor could potentially reduce a home's value up to 10% according to the appraisal institute. The effect is referred to as external obsolescence, where external factors affect a home's value.
5 Ways To Save For A Down Payment On House
Deacon Hayes, owner of financial education company Well Kept Wallet says “Renting might seem fine at first but once you have enough money to put down on a house, then it makes more sense to buy.” In order to make a down payment, people save for years but living on rent makes it impossible to invest.
Hidden mortgage costs in Real estate
Purchasing a house is the best investment you will ever make. You are excited that you found your perfect home. However, it’s just the start and it is important to be realistic about the additional expenditures. So, we have listed a few hidden costs that we think every homebuyer should be aware of.
