No this again! You finally found your dream house but can’t afford it because your credit history is poor. If you have been making pretty bad financial decisions, it will reflect poorly on your credit report. But not to worry because you with a few simple, carefully taken steps, you can improve your credit score.
First of all, get in touch with your Orlando buyers agent and ask recommendations for lenders. Since your agent knows your needs and wants, he will be better able to get you in touch with a mortgage lender who will help you secure a loan.
Following is a breakdown of credit score that will help you understand how it works:
Poor Credit – 300 to 650 (Your loan application might be rejected and if it is not, you will be charged a high interest rate on the loan)
Fair Credit – 651 to 700
Good Credit – 701 to 759 (Offers you reasonable interest rates and with no previous history of debts, the lender will be willing to negotiate)
Excellent Credit – 760+
Now, let’s have a look at some of the ways how you can improve your credit score:
Don’t Close Accounts
Your first thought might be to close all the extra accounts, but this is a big mistake. This will lower your credit score, as its history from the credit report will be wiped. What you can do is use the extra credit cards for paying a small bill. Put it on auto pay and use it only for your gym membership or Netflix account.
Go Over Your Credit Report Thoroughly
Get your credit report from three of the biggest credit reporting agencies: TransUnion, Equifax, and Experian. You are entitled to one free credit report every year. The reason why you need to get all the credit reports is that you need to make sure they have the same charges. If you have a negative charge that does not match your receipts, make a call immediately to the agency and get it rectified. This might be the reason why your credit score is low. Do inform your Downtown Orlando realtor about this.
Avoid Swiping the Card Wherever You Can
Always make sure that your payable balance on the credit score is less than 50%. Having a credit card limit of $3,000 with a balance of $2,000 is too much. There are two ways to handle this: either use cash only for most of your transactions or ask for a greater credit limit. The latter might put you in deeper debt if you are not careful with your spending. So make a wise decision.
Pay Off Past-Due Balances
The longer you wait to pay your overdue balances, the more negative points will be added to your score. From utility bills to credit card bills and loans, you need to start paying off everything. Start with the big balances, as they impact the score more.
When buying a house, always look towards your Lake Mary realtor for advice. Before placing an offer on a house, visit Megan Dowdy Realty. Get in touch with a real estate agent to get your dream house within your budget.