What You Need To Know About Your Credit

5 Things You Need to Know About Your Credit Before Buying a Home.





We get it it. The topic of credit can seem extremely foreign to you, especially when it comes to buying a home. There are a few things to know before looking for the perfect mortgage company to help you do so. Below you will find a list of things you should know before applying for a mortgage. Check them out:


1. Know Your Credit Score


The first thing you will be asked when working with a mortgage agency is, "What's your credit score?" Be sure you know this before thinking about buying a home. But if you don't, our team here at UHOUSI can help you find out your credit score. You should get a credit report from each of the three credit agencies--Transunion, Equifax, and Experian. You will be able to get a free copy of each of these reports once a year, which you can obtain by going to the website annualcreditreport.com.


2. Understand What Your Credit Score Means


After you obtain your credit report, you need to understand what these numbers mean. Here is a general idea of how credit is broken down:


750 + -Excellent Credit

700-749 -Good Credit

600-699 - Fair Credit

600-649 -Poor Credit

Below 600- Bad Credit


Keep in mind, there are many mortgage agencies that will help you get a home if your credit falls within a certain range. For example, you may be able to qualify for a mortgage here at UHOUSI if you have a credit score of 620 or higher.


3. Fix Any Errors on Your Credit Report


After running your credit report, you may notice a few things that don't seem to make sense or appear to be false. You need to follow up on this. Fixing any errors on your credit report can help to improve your credit score. You will need to contact the credit bureaus and report any false information in order to get this to disappear from your report and help improve your score.


4. Pay Off Smaller Debt


If you can afford to pay off smaller debt, you should definitely do so before thinking about applying for a mortgage. This will only help to improve your credit. For example, if you have a small hospital bill in collections, try to pay that off ASAP. It may help to improve your chances of being approved, and will be worth it in the long run. Hey, think about what a month without Starbucks can do when trying to pay off a small bill. It may not be as difficult as you think.


5. Limit Yourself From Applying For Any New Credit Cards At Least A Year Out From When You Plan To Buy


We've all been there. Applying for a new credit card can be very tempting. If you're thinking about home ownership any time soon, try your hardest to avoid applying for a new line of credit for at least a year prior to applying for a mortgage. We advise against this because it can put you at risk of decreasing your score when opening a new line of credit.


Have more questions about your credit? Leave a comment below and we will try to get back to you ASAP, or guide you to the perfect resource to answer your question.




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*UHOUSI Initiative is sponsored by Chenoa Fund through CBC Mortgage Agency, a federally-chartered, public purpose tribal government lender, 912 W. Baxter Drive, Suite 150, South Jordan, Utah 84095 (“CBCMA”)(NMLS#1186381). CBCMA offers down payment assistance in conjunction with its correspondent lenders.

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