Have you been looking at the housing market and thinking you want to buy a home?
Ads are everywhere listing properties.
It would be hard to make it through a day without seeing eye-catching photos of your possible dream home.
But before you fall in love with that home – any home – do you know what your credit score is? When is the last time you checked your credit report?
Those two things should always be the first steps you take when you start thinking about buying a home.
Any lender will pull reports from all three bureaus and take the median score so it’s important to know the information on all three.
The free versions of the reports do not include your score; however, you can pay a small fee to have that included.
Some credit cards provide you with your free score so check if that is available to you. But don’t open a new account just to get your score!
A score of 740 or higher should qualify for the best mortgage rates. Anything below 640 is going to make it difficult to qualify.
Get your free copy of your credit report from all three credit bureaus at http://www.annualcreditreport.com
WHAT TO DO IF YOUR CREDIT ISN’T STELLAR
First review your report for accuracy. Check all names listed, including spelling, former addresses and account information. You can dispute any errors to all credit bureaus online.
If all items are accurate but perhaps not favorable, it is best to focus your attention on rebuilding your credit. It’s not always easy but there isn’t anything on your credit report that “time and/or money” can’t fix. There are great resources online or at your local library if you need guidance. For example, Dave Ramsey’s “Debt Snowball Method” advises to make all your minimum payments and focus any available extra onto the account with the smallest balance. Once that account is paid off, add that payment to the next smallest account and so on until you are debt free. Mortgage lenders are also happy to talk with you about ways to repair your credit.
Most importantly, know that no “credit repair services” can do anything you can’t do for yourself – for free.
Negative account information will stay on your credit report for seven years from the date of the original delinquency. Once negative accounts have been paid off, all you can do is wait. It doesn’t take the entire seven years for your score to start increasing but patience is required.
Repairing your credit is simple. Not often easy but simple.
Mary Barnett is a real estate professional with Equity Idaho Real Estate committed to providing her clients with the most comprehensive service in the Treasure Valley. Mary brings years of executive and professional experience including her time as the Chief Operating Officer of Consumer Credit Counseling Services of Idaho.