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Get Your Credit Ready for Buying a Home

Get your credit ready to buy a home 

So you are thinking about buying a home?  Getting your credit ready should be one of the top items on your to-do list!  Your finances should rank above size of the house, style of the house, and even the location.  The condition of your credit can be vital to getting all those things you want from your new home.

But the chicken doesn't always come before the egg...  Buyers these days don't always secure their mortgage financing before starting to search for homes.  The National Association of Realtors has recently reported that more and more often purchasers are starting the home buying process by obtaining a 'Pre-Approval" letter from a mortgage loan officer then starting to look for a home.  Many purchasers prefer to go this route so from the very beginning they know how much they can afford to spend on a home.  If you are about to be in the market for a new home and you need guidance on which mortgage company to choose, we have a preferred list for you to take a look at.  Preferred Mortgage Companies 

5 Simple Steps for Credit Readiness

1.  Pay down revolving credit lines.

The credit reports will look at the amount of credit you have available in each line.  Use gift money, tax refunds, or unexpected earnings to pay down your lines to below a fifty percent limit.

2.  Make your payments on time.

You will want to be consistent for at least six months.  If you are prone to forgetting the due dates then schedule automatic payments for your lines of credit.  Credit reports only see that the payments are made on time not how those payments were made.

3.  Avoid all new credit inquires.

Every time you sign up for a store credit card to get that extra percentage off or talk with a company about payment system, you risk having that company run your credit.  Each time your credit is run, it can hurt your overall credit score.  Commit to walking away from all of these deals until after you have closed on your new home. 

4.  Keep revolving credit open even after you have paid it off.

Closing accounts can cause a negative effect on your overall credit score.  Wait until after closing to close out those unnecessary accounts.

5.  Review your credit report.

Each of the three major credit reporting agencies will provide you with one free report every twelve months.  Use the link through Annual Credit Report dot com to keep track of your credit history and to correct any errors that might appear.

Huntsville Credit Repair

Your credit report can be vital when it comes to purchasing your home.  Before you begin the process of looking for real estate, take time to get your credit in order.  Pay down your existing credit.  You can schedule payments to create a record of paying on time.  Avoid new lines of credit or closing old ones.  Keep an eye on your credit history.

A little investment can go a long way when it comes to your credit.  Having a strong credit score can help with reducing finance costs.  You should make getting your credit ready a priority when it comes to preparing to purchase a home.