Buying a home for the first time is a big decision and requires a lot of planning. One crucial aspect of home buying is applying for a loan, without this, it’s likely all hopes of owning your own place will be crushed. To find out if you are a financially responsible person, a lender will generally look to your credit report. This report contains information about whether you have debt and if you have a history of paying bills on time etc. A lender can determine if you should be approved for the loan based on the report. Clearly, it’s a good idea to work at maintaining a good credit report but, what are some ways of doing so?
Have you acquired a variety of different credit cards over the years? Go through them and look if there are any you no longer use, then call the credit cards company to cancel them. Too many credit cards may not reflect well when applying for a loan as it can give the lender the idea that you allow yourself too much available credit and will easily put yourself in economic peril. On the other hand, if you keep your longest held credit cards, this will show a longer history of credit which can work in your favor.
Were you aware that a late payment can show up on your credit report? It can be easy to do if we do not remember the payment due date so, to remedy this, set up an automatic payment plan that will at least cover the minimum due. This way you will not only work at maintaining a good credit report but also eliminate those expensive late payment fees
Why not request a copy of your credit report so that you can view it before a lender does? You are allowed a free copy every year so take full advantage of it. A credit report, on occasion, contains an error which could affect your loan application. Obtaining a copy beforehand will allow you to look through it and, if there are any errors, have them fixed.
When we are young we don’t always think about maintaining a good credit score but, doing so will help increase our chance of loan approval in the future.
Devereaux Van Dyne, Certified Professional Home Inspector