Credit and Buying

Give Yourself Some Credit!

Credit is an important component in helping you find the best loan product to meet your home buying needs.

The way you handle credit obligations can greatly affect your loan choices and the interest rates you can get. In short, the better credit you have, the more loan options you will have to choose what is best for you and your financial goals.

If you're in the market to buy a home, and you want to make sure you're doing everything you can to maintain good credit, here are a few tips:

• DO pay what you owe � regularly and on time.
• DON'T skip payments.
• DO have a checking and a savings account.
• DON'T hold more than four credit cards.
• DO keep your total debt-to-income ratio under 36 percent.
• DON'T exceed or continually increase your line of credit.
• DO keep track of your spending and stay within your budget.

Your lender will view your credit report, when determining which loan products are best for you. Using your credit history, the credit bureau will develop a credit score. The higher your credit score, the more likely you are to qualify for a loan with the best interest rates.

Not sure where you stand? It�s wise to obtain a copy of your credit report in order to know your score at least once a year, and especially before making a large purchase, like a house or a car, in order to review for accuracy and find out how you can work on improving it, if necessary. You'll see the consumer credit given to you over the past seven years and be able to check your highest balance and current balance on outstanding debt, as well as see details about on-time and late payments. Your home mortgage consultant should be able to help you better understand what your score means.

You can get your credit report from many sources, but should you find something in your report that may not be accurate, only the credit agencies can actually correct the data on your report. Contact the three major credit agencies directly:

Equifax: 1-800-685-1111 or www.equifax.com
Experian: 1-888-397-3742 or www.experian.com
TransUnion: 1-800-916-8800 or www.transunion.com

As for less-than-perfect credit, you should know that lenders typically are more concerned with how you�ve handled your recent credit than with what happened years ago. But even if you have a blemish on your credit history, don't let that stop you from buying a home. Buying a home � and paying your mortgage on time each month�is a great way to build your credit. If you�ve got credit questions, your first step should be to contact a trusted home mortgage consultant who can help you find the right loan product to help you attain the home of your dreams. Visit Steve's preferred lender here.