4 Credit Secrets for Buying a Home
In a report that was done by the Federal Trade Commission in 2015 they found that 1 out of every 4 consumers had errors on their credit report.
That being stated, means that it’s possible that you could possibly fall under that scenario. There are many things you can do to improve your credit on your own and should consider before buying a home. Let’s dive into four ideal credit secrets that will help rebuild your credit and improve your score.
Pay off collections first, inquiries second.
While it’s unattested of people living in South Florida, living on credit at one point or another is the norm. We’re talking about using credit cards for everyday living expenses, like rent or groceries. If you’ve fallen behind these are the first debts to focus on.
According to the folks at Experian, charge card debt is about 50% of most people’s issues when it comes to scarring or less-than-perfect credit.
By paying any of the items that went to collections first, then focusing on your hard inquiries second you’ll see an improvement in your score almost right away.
By the way, if you check your score once in the morning and then once at night it will most likely be different. The debt fairies are constantly changing and reporting, making it very hard to stay consistent.
The good news is, most of the time they are off by a few digits. Hard inquiries are generally coming from lenders for items like mortgages, car loans and more credit cards.
They can stay on your report for a while, and there are some cases you may have to ask to have them removed.
Be consistent with all 3 of the bureaus
Each score is synonymous to the other two bureaus. Don’t forget to be consistent with all three of the credit bureaus (TransUnion, Experian and Equifax).
Just because you ask for an item to be changed or removed, doesn’t mean that all three get the message.
By pursuing your due diligence, and following up with all three you are ensuring that they are undeviating from one another. Peace of mind will be beneficial by having consistency in place.
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Check for errors and discrepancies
You’d be surprised to learn how many people fail to do this. A man who’s a Senior, Junior, the third, etc., needs to make sure his credit is being reported and not a relative. This is a common mistake that does happen.
Of course, everyone wants to believe bureaus are safe from ‘human error’, but this is just not the case. It’s your credit and your responsibility to know what’s on it.
It’s also necessary to stay engaged in being accurate. The last thing you want is to run into an incubus during an important purchase, such as buying a home, so be sure to check this often.
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By law, you are entitled to one free credit report a year. Contact a loan officer for more details on how this works.
Working hard to manage your credit is important. Healthy credit makes you have the security necessary knowing you’re covered with issues like emergencies or better yet, a vacation. It’s also vital when getting a mortgage.
The other credit secret that we want you to know is that following up is HUGE when it comes to buying a home. Once you start to pay off your debts, you’ll want to follow up with the creditors.
Your report, needs to be consistent with all three bureaus and if you find errors, keep following up with the appropriate party until they’re gone.
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