Credit Scores And Buying A Home!
by Christopher Henwood
We all have credit scores and we know that they are important. But how many of us understand how our scores are calculated and the ways in which they impact our everyday lives? Credit scores are vitally important when you are in the process of buying a new home and getting pre-approved for a home loan. They determine what interest rate you receive and can even determine your qualification for certain types of loan programs.
Here are three things you should know about credit scores when buying a house:
Not all credit scores are the same. If you’re like me, you keep a close eye on your credit scores with either Credit Karma, your credit card statements, or some other method. You may have noticed that your scores can vary significantly among the three main credit bureaus; Experian, Equifax, TransUnion. This is because each of the bureaus uses a slightly different system to arrive at your credit score and may pull different data in their calculations. Knowing your credit score with each of the three bureaus is essential.
Be in control of your credit score.
Everyone is entitled to a free copy of their credit report each year. If you go to annualcreditreport.com, you can get a full copy of your credit report each year from each of the three main credit bureaus. I suggest you stagger your request to receive a report from one of the bureaus every four months. If you see something incorrect on your report, the contact information for each credit bureau and your creditors are listed so you can try to resolve the discrepancy.
No late payments!!
Nothing will lower your credit score faster than having 30-day late payments recorded on your credit report. Make sure you pay all your bills on or before the due date, even if you only make the minimum payments. This includes your current home loan payments. A single 30-day late home loan payment in the past 12 months can disqualify you from getting another home loan. The bottom line here is to be sure to pay all of your bills on time, especially when you are looking to buy a new home.
There are many other aspects to your credit scores and how to protect and maximize them. Please feel free to connect with me to discuss how I can assist you on your path to financing or refinancing your home.
Chris’s focus is always on the client. Having a deep and varied background in finance, the law, media, and mortgage banking, Chris derives tremendous satisfaction from helping his clients obtain financing that works for them. While working with clients going through or recently divorced, he realized they face particular challenges and require a bit more understanding, advice, and care. Partnering with Vesta allows Chris to connect with those trying to navigate the divorce process and help them with the sometimes overwhelming prospect of either refinancing or buying a new home with the tools and support Vesta provides.
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