Looking to buy a new house? Buying prime real estate in a safe and beautiful neighborhood is always a worthwhile investment. However, it can also be one of the most expensive decisions you will ever make.
In most cases, you will need to take out a mortgage or a loan. Your creditors or lenders will be looking at several things before they decide to help you out. The most important area of concern for them will be your credit score.
Your credit score is the result of your credit history, payments, and outstanding balances on your payments. Score well in these areas, and you can expect smooth home financing following your house-hunting efforts.
We will tell you how to do just that. Read on to learn more about what you can do to raise your credit score for a home loan or mortgage.
Pay Bills On Time Every Time
The most important aspect of your credit score is your payment history. According to FICO, payment history contributes more than a third of your credit score. For this reason, you need to pay all your bills on or before the due date. Doing so can reflect positively on your payment history as you take a loan for real estate.
One of the most commonly delayed bill payments is credit card bills. Quite often, the delays are the result of errors on the part of credit card companies. This brings us to tip #2!
Report and Challenge Errors to Your Credit Reports
Erroneous or otherwise, a delayed payment on your credit report will reflect on your credit history. A report like this can stay on your record for as long as seven years.
To prevent a bad record, immediately challenge mistakes in your credit report as soon as you spot them. There is a 30-day grace period between the creation of the report and the consolidation of credit bureaus. Use this period to clear up your records with credit companies.
However, what if you have not paid because you are unable to?
Discuss “Goodwill Adjustments” With Your Lenders
Sometimes, we just cannot gather enough money to pay loans on time. In these situations, a goodwill adjustment may be the solution.
By agreeing on a grace period or alternative payment arrangement with your lender, you can avoid the dreaded delayed payment report. Your lender can decide to stay mum about your delayed payments as you continue to settle your account.
You may be paying for a little longer than expected. Nevertheless, you get to keep a clean credit record.
How To Boost Your Credit Score? Pay. Dispute. Agree. Repeat.
Pay bills on time. Dispute any errors to your credit reports. Agree on an alternative payment scheme with your lender.
Raising your credit score for real estate does not have to be complicated. Performing any or all of the tips mentioned here can take care of most credit history issues. Follow these tips, and you will be a step closer to moving into your new home.