The Importance of Your Credit Score When Buying A Home
A recent article in the Durham Homes Magazine points out the importance of a good credit score when applying for a mortgage. A score between 550 and 750 in usually required to obtain a loan. The score is calculated by considering your past payments punctuality, amount of current debt, credit history, and types of credit used. An important note is that recent searches on your credit history account for 10% of your score, so do not let a lot of companies do credit searches on your history!
Here are some ways to increase your score:
- Always pay your bills ASAP (at least 4 days before they are due)
- Keep your credit card balances below 50%
- Use one credit card often (but pay it off)
- Avoid having too many open lines of credit
- Do not cancel old credit cards (Unless you have other cards)
- Do not ask to reduce your credit (It lowers your ratio and it will hurt your score)
Your credit history is really important and it takes a long time to fix, so look after it!
March 23rd, 2007 at 11:09 am
To get a house, get a car, have a credit card, and basically legally exist in the United States, you need to have credit. And if you want to have the best opportunities for success, you’re going to need GOOD credit. Yes, you did see those words ‘Good Credit’; it’s not an oxymoron – it’s quite possible. But there are people who has a problem with their credit score. Their are companies now that specialize in providing bad credit credit cards for people with bad credit.
May 2nd, 2007 at 3:36 am
Good post! Always keep an eye on your credit report and credit score! The better your credit score is, the more chances to get a loan or credit you have. When you are going to buy home and apply for a loan, you need to be sure that everything with your credit report and score is OK. And always aspire to higher credit score! Otherwise you have less chances to make big purchases.