You are standing in the checkout lane with that new purchase and you swipe your credit card…..DENIED. Does this sound familiar? As your stomach drops to your knees and feel your face turning red, you realized that you are over your credit limit OR your payment was late.
Throughout most people’s lives, this very situation has occurred. Is it important to be in control of your credit? YES!!!!
Your credit score impacts your life tremendously, especially if you want to purchase a home.
WHAT IS A GOOD CREDIT SCORE?
Credit scores can range from no credit to above 800. Credit scores below 600 are considered low. Having a score above 700 is considered good; whereas a score above 800 if great or excellent.
WHY SHOULD YOU HAVE A GOOD CREDIT SCORE?
A credit score indicates how likely a person will repay a loan. The lower the score, more risk is involved lending a person money i.e. late payments or no payments made at all! Not having a credit score or having a low credit score impacts your ability to purchase a home. Banks and Mortgage lenders associate lack of credit score or a low credit score as a large risk when loaning a person hundreds of thousands of dollars. Moreover, the lower your credit the higher the interest rate of a loan.
HOW TO FIX YOUR CREDIT SCORE:
Meet with a Mortgage lender to discuss a plan of action. Did you know lenders are able to rapid re-score your credit?
Make sure your credit report is correct and there are no errors.
Pay down your balances on credit cards, auto loans, and open lines of credit. Work on balances with the highest interests rates first and then proceed from there
Many potential home buyers over estimate their credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.