BUILDING YOUR CREDIT SCORE

A bad credit score can be a hindrance to your achieving many feats, including home buying and employment. Not building a good credit is risky which is why you need to learn more about it.oliur-745347-unsplash

Your credit history right from the beginning reflects on your credit score. It is possible to repair a bad credit but quite rigorous and slow. It is easier to just build a good credit score over time.

For beginners without credit history, this may be tricky but you are at an advantage.

  • Establish a Credit: With no prior credit history, there are some legal ways you can establish credit.
  1. Get a secured credit card – You are however required to make a cash deposit which will also represent your credit limit. Though temporary, but it will help you get an unsecure credit card.
  2. Find a co-signer – There needs to be an understanding between you and the co-signer because if you fail to repay, the co-owner must. The co-owner should be someone with a good credit score.
  3. Authorized user – You can become some other card user’s authorized user. Friends or family can give you access to their credit cards to help you build your own credit history. You are not legally bound to repay, but it is advisable that you do.
  4. Get a retail store credit card – You have a chance to show you can be responsible at handling money. You need this to reflect on your credit history, watch the interest rates on these cards though.
  5. Apply for student credit cards.
  • Build Credit Without Credit Cards:
  1. Apply for student loans, auto loans or other personal loans to help you build credit. However, you must endeavor to pay up on time or else, you will incur a bad credit score.
  2. Mortgages for home buying and rents are also viable means of kick starting your credit history.
  • Build Your Credit Responsibly: You do not want to adversely impact your credit score when you are building your credit history.

 

  • Never miss a payment – Even if you can only advance the minimum payment, please do so rather than late payment. Your payment history is a crucial factor on your credit score. Timely payment of credits and bills reflect positively on your credit score.
  • Borrow less – Do not borrow more than you can afford. Owe as little as possible and be responsible in your spending. Endeavor to have low credit utilization rate. Pay off your debt including mortgages when home buying. Don’t move them around to avoid bad credit score.
  • Open fewer new accounts – Do not fall into the temptation of opening numerous new accounts. It will lower your average account age.
  • Check your credit reports – It is pertinent that you request for your credit report from any authorized agencies. There may be errors in your report which you need to dispute with the credit bureau. You will be able to measure your progress with knowledge of your credit reports.

 

As you build your credit –

  • Get useful credit cards, manage them wisely and don’t let them go unused.
  • Leave your accounts open as this enhances your credit score.

3 Important Factors To Consider When Deciding To Buy A Home

Are you ready to buy a home, but are unsure how much of a home loan you can handle? When it comes to buying a home, there is a lot that goes into the home owning process. Between applying for a loan, finding the perfect home, and navigating through the twists and turns of the entire process. 04-04-21-891_640

Before applying for a home loan, review your FICO score. Depending where your FICO score falls, will determine if you qualify for a loan, how much you’ll get, and what your interest rate will be. To find out what you qualify for, speak with your loan officer at your bank or credit union or a mortgage lender to find out where your score falls.

Another important term to know when deciding if you qualify for a home loan is your debt-to-income ratio. A general rule of thumb, when it comes to mortgage loans, is to avoid dedicating more than 28% of your monthly take-home income.

While you’re calculating your debt to income ratio and finding out how much of a home you can afford, take a moment to consider future expenses. Don’t stress yourself more than stretching yourself too thin where you’re struggling to pay your bills or save for retirement.

After you’ve weighed all the factors and decided you’re ready to move forward towards home ownership, a real estate agent can help you find the perfect home.

Give us a call today and let us help you find a place to call home.