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2016-09-16 16:14:37
First Time Homebuyer Steps to Success (Step 2)

Last time we looked how lenders determine your rate and your credit worthiness based on your credit score. We suggested that you order your credit reports from the “big 3” credit reporting agencies.

When you receive your credit reports look for mistakes or anything else you can challenge. According to a CBS News report, about one out of every five credit reports contain errors. The study also found that one out of 10 of these errors are serious enough to diminish the consumer’s chances of obtaining credit.

Common errors found in credit reports include:

  • Other people’s accounts listed as the consumer’s.
  • Incorrect personal information, such as birth date and social security number.
  • Closed accounts listed as open, with outstanding debt.
  • Accounts in good standing aren’t listed in the report.

Dispute anything in your report that appears to be a mistake. The credit reporting agencies, by law, must investigate your dispute and correct inaccurate information within 30 days.

Your FICO® Score

Thankfully, your credit score isn’t etched in stone but rises and falls according to how you use credit. There are several ways to boost your FICO®.

Start by paying off accounts that you’ve fallen behind on. Late pays count heavily against mortgage borrowers. Here are a few other ways to help clean up your credit history:

  • Pay down other debts, starting with the one with the highest balance.
  • Pay down credit card balances that are at the credit maximum and keep the balances low.
  • Don’t close old credit accounts – they’re good for your score.
  • If you don’t have a credit card, apply for one, use the credit sparingly and pay the balance every month. Applying for the card will lower your score but if you use the card responsibly, your score will rise.

Although these tasks may seem time consuming, if they raise your credit score a few points, it will be worth it when you go to apply for a mortgage.

     

Even after a bankruptcy, it's not uncommon for people to see their credit scores skyrocket up into the 700s if they have absolutely no late payments or collections,” says Chris Bridges, former credit and identity theft consultant with Vision Credit Services in Washington, D.C.

Please join us next time for Step 3 in the home-buying process.

 

 
Blog Archive
2016-09-16 16:23:17
The Home-Buying Wish List

2016-09-16 16:22:40
3 Common Home Buying Myths

2016-09-16 16:21:15
3 Tips for Attending Open Houses

2016-09-16 16:20:51
2 Things to Consider Before Buying a Townhome

2016-09-16 16:20:36
4 Tips for Home Buyers with Boats

2016-09-16 16:20:16
2 Tips for the Luxury Home Buyer

2016-09-16 16:19:58
What is a Buyers Market?

2016-09-16 16:19:38
Writing a Strong Offer

2016-09-16 16:19:15
3 Important Aspects of the Purchase Agreement

2016-09-16 16:18:26
3 Things to Know about Buying New Construction

2016-09-16 16:18:09
2 Things to Know about Home Inspections

2016-09-16 16:17:58
What to Look for in the HOA Documents

2016-09-16 16:17:44
HOA? Beware the Rules and Regulations!

2016-09-16 16:17:16
Everything you need to Know about Home Warranties

2016-09-16 16:16:37
4 Tips to Close Quickly on a Home Purchase

2016-09-16 16:16:16
Your Moving Checklist

2016-09-16 16:15:58
Buying your First Home? Avoid these 4 Common Mist

2016-09-16 16:15:35
Tips for Buying a Fixer-Upper

2016-09-16 16:15:08
First Time Homebuyer: Steps to Success (Step 1)

2016-09-16 16:14:37
First Time Homebuyer Steps to Success (Step 2)

2016-09-16 16:14:15
First Time Homebuyer Steps to Success (Step 3)

2016-09-16 16:06:37
How much can you afford?

2016-09-16 16:06:08
The Essential Real Estate Glossary

2016-09-16 16:05:48
What is the Earnest Money Deposit

2016-09-16 16:05:10
Home Appraisal Basics

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