Want to buy a house? You know that your credit score has a lot to do in what kind of program or interest you will get at the moment of qualifying for a home loan.
It does not matter if is your first home, second home or an investment if you are in need of a loan to buy a property your credit score will play a key role on it. But don’t worry if you have less than a perfect credit score that is why CasaMia Mortgage is here to inform you and help you increase your score
First check what is your actual credit score.
You can do this in several ways, but easiest way and free access to your credit score is in this link go to myannualcreditreport.com and get a statement on your credit report and see if everything is right, scan it for any errors. Some common mistakes include duplicate credit accounts, because your report may look like you have more debt than you really do, and look for any other errors like a misspelling of your name. If you find wrong information, you need to dispute it in writing and letting them know what’s wrong with your report.
Educate yourself on how credit score works.
According to Consumer Financial Protection Bureau a credit score predicts how likely you are to pay back a loan on time. A scoring model uses information from your credit report to create a credit score. Some factors that make up a typical credit score include: bill-paying history, current unpaid debt, number and type of loan accounts, how long you have had loan accounts open, how much of your available credit you are using, new applications for credit, among other factors.
Maintain a low credit utilization ratio.
A very important factor is the percentage of your total available credit that you use. As a rule of thumb keeping a limit of about 30% of your total credit line send a positive message to the credit agencies. For example, if your credit line is $1,000, keep your credit utilization at $300 or less.
Pay all your bills on time.
Paying your bills on time is an important factor in how to increase your credit score to buy a house. If you have history of late payments is a negative impact on your score if you often forget to make payments on time, consider setting up autopay. Remember your payment history is one of the main factors that affect your credit score.
Consider score-boosting programs available.
For example Experian has a free program called Experian Boost that allows people to link their payment history from their phone and utility bills to their credit report. If your credit history is not old enough this is a great way to build credit fast. Another program UltraFICO allows you to use your banking data, like savings and checking accounts, to be added to your report and be considered when calculating your credit score.
You won’t drastically improve your credit score overnight. The best way to achieve an excellent score is to develop good long-term credit habits. Establish good habits, like paying your balances on time, keeping a low utilization rate, and applying for credit only when you need it, and you should see those practices reflected in your score over time.
Once you are ready look for the right mortgage lender.
Getting preapproved for a mortgage is a crucial first step in the home-buying process. It gives you an idea of how much you can borrow, which will help narrow down your search to houses in your price range. The preapproval process could also uncover potential issues that would prevent you from getting a mortgage, so you can work them out before setting your heart on a house.
In short, getting preapproved for a mortgage signals that you’re serious about buying a home.
Fortunately, getting preapproved is relatively quick and simple and remember with CasaMia Mortgage Company is easy to get a loan.
Sources: ConsumerFinance.gov, Money.com, & CreditKarma.com