If you’re in the beginning stages of buying a Smith Mountain Lake home, you may be checking out listings in different neighborhoods to get an idea of pricing. However, one of the first steps you should take when preparing to buy a home is checking your credit score.
Credit scores give banks an idea of what kind of borrower you might be. A high credit score shows financial responsibility, whereas a low score might signify a financial risk. Also, a good credit score is typically rewarded with more attractive loan terms.
Defining a Good Credit Score
A credit score over 760 is considered to be in the perfect range for mortgages. A score below 700 is deemed “fair.” If your credit is under 700, then now is a good time to start working on raising your score.
Improving Your Credit Score
The first area to focus on when fixing your credit score is your debt-to-credit ratio. In simple terms, this refers to how much room you have open on your credit cards. Experts agree that using only 30% of your credit limit is optimal. If you’re approaching your limit, start paying down the debt. You’ll soon see an increase in your score.
Check Your Credit Report for Errors
If you see false information, then contact the credit bureau and file a complaint. The process may not yield swift results, but those deletions could help raise your score.
Make Timely Payments
Your payment history affects your credit score. If you’re a chronic late-payer, then your credit score will reflect it. However, if you only have one or two late payments, it’s worth making a phone call to the creditor to see if they will remove it.
If you’re in the market to buy a new home, then contact a local real estate agent to help you understand your options. Aside from having a great relationship with area mortgage lenders, an experienced realtor will help you determine how much house you need, and show you homes that fall within your budget.
Source: Trulia.com, What’s the Ideal Credit Score for Landing a Mortgage?