A good credit score can mean lower mortgage rates, higher loan offer amounts
The significance of a good credit score should not be underestimated when it comes to buying a home. Besides having an impact on the mortgage rate that is offered, a good credit score can also qualify home buyers for a larger loan and as a result, a better home. Since the majority of young home buyers have average credit scores in the 650 range, J.Christopher Real Estate Group would like to share some tips that can help prospective buyers boost their credit score quickly.
“One of the first things we ask home buyers before taking them on tours is, ‘how is your credit,’” said Jarrod C. Lewis, owner of J.Christopher Real Estate Group. “We have worked with individuals who thought their finances were in order only for them to learn something damaging came up in their credit report.”
For this reason, Lewis tells individuals who are looking to buy a home to know their credit scores well and to flag anything suspicious to credit agencies as soon as possible. While a bad credit score will not automatically disqualify people from buying a home, it can cost homeowners thousands in the long run.
If you have a credit score that is below the national average and are looking for a new home, we encourage you to read the tips below so you can improve your credit score fast.
Keep your balance-to-limit ratio low
The balance-to-limit ratio refers to the difference in money owned versus the total credit limit available on a card. For instance, owing $500 on a credit card with a $10,000 limit would be seen positively. It is imperative to keep these balances in check.
Flag any errors in your credit score
Home buyers should resolve any glaring errors in their credit reports because it can influence their pre-approval offer. Sometimes an amount owed that was completely paid off will show up in a report.
Pay your bills on time
Home buyers may not know that late rent payments, car payments, and student loan payments can appear on credit scores. Since you don’t know what will be reported, it is better to assume that all late payments are being monitored.
Aim to receive pre-approval offers within 30 days
When you are shopping for mortgage rates from various lenders, home buyers should aim to acquire offers within a month so that the credit inquires themselves do not lower your credit score.
Every home buyer is unique when lenders are determining which buyers are qualified for a loan. Some will have a 20 percent down payment saved up and bad credit, and others may have the complete opposite scenario. And in both cases, they could still be qualified for a mortgage. Speak with a J.Christopher Real Estate agent at 401-830-6906 today to be one step closer to living in your dream home.