How Important Is A Credit Score In Home Buying Process?
People Question #61
In our previous article we discussed What Is a Credit Score, and How Is It Calculated? to review it just click the hyperlink button and rediscover this information.
Moving forward, in this article we will discuss how important a credit score is in a home buying process.
For starters, your credit score determines a lot more than the loans you can get and the interest rates you pay.
Insurers use credit scores to set premiums for auto and homeowners coverage.
Landlords use them to decide who gets to rent their apartments.
Credit scores determine who gets the best cell phone plans and who has to make bigger deposits to get utilities.
Credit scores are a financial tool, in other words, but whether they’re a lever or a hammer depends on how good they are.
The question is why do credit scores matter?
Since credit scores have become such an integral part of our financial lives, it pays to keep track of yours and understand how your actions affect the numbers.
You can build, defend and take advantage of great credit regardless of your age or income.
A credit score is the basis or foundation of whether a certain person is a good payer and/or is able to track of financial stability.
With this, you can leverage great scores into great deals — like in a rent to own home program.
Bad scores can hammer you into missing out or paying more.
Build credit without debt
Millions of people don’t have a credit score because they haven’t used credit, or haven’t used it recently enough to generate scores. Two ways to build credit include:
- Apply for a credit-builder loan, which places the money you borrow into a certificate of deposit or savings account that you can claim after you make 12 monthly payments. Many credit unions and community development financial institutions offer credit-builder loans, as does online lender Self Lender.
- Applying for a secured credit card, which gives you a line of credit equal to the amount you deposit with the issuing bank, also helps build credit.
- Once you have a score, you can use a credit score simulator to see what actions might help and hurt it.
Grow credit with good habits
Good credit habits include:
- Paying your bills on time is crucial to growing your scores. Nothing counts more.
- Pay balances in full. There’s no need to carry debt when your goal is growing your scores. If you do carry balances, try to pay them down as quickly as possible.
- Light but regular use of your credit accounts is also important. Know your credit limit on each card and charge no more than 30 percent of that limit.
- Avoid closing accounts if you’re trying to improve your credit. Once your scores are high — over 760 or so — you can close an account or two without major damage, but try to keep your highest-limit credit cards open.
To learn more on how to improve your credit score. View our previous article by clicking the Improving your Credit Score hyperlink.
Take advantage of your good credit
Once your scores are near 700, you’re considered a good risk. When they’re over 760, you’re a gem. You should expect the best rates and terms lenders have to offer, since they’ll be competing hard for your business.
With this credit score it will be no time before you can get the dream home you’ve been wanting, especially if your credit has improved substantially since your lease was set up.
With all the money you save, in better rates; less expensive insurance and the other points mentioned above, you can make progress on important financial goals such as saving for retirement, boosting your emergency fund or getting out of debt faster and most important, if you’re considering buying a home.
That’s the real power of great credit scores. Instead of begging for loans, paying too much and trying to make do with what’s left over, you’ll finally have some options to get ahead.
So what if you have a damaged credit? Can you still afford to get a house? The answer is a big yes!
Here at Home Buyers Inventory even if You Have a Damaged Credit- Can you still buy a home? it’s not a big issue
Why? Because our people in our company focus on people who have damaged credit but are willing to change they’re situation in time. Because we know what that feels like.
Over the coming months, if you are consistent in paying on time you will be able to fix your credit score and you will be suitable to get your dream house.
To learn more about this, here is an article that fully discusses how this could work for you. Home Loans With Bad Credit
GET FREE RENT TO OWN PROCESS INFOGRAPHICS
