Ready, set, MORTAGE! As Nashville Real Estate Agents we get a lot of questions regarding credit! So here are some of our credit tips we have collected!
So you have made the decision to buy a home, but like 88% of home buyers you need to finance a portion of the purchase. Consider these steps to get your credit in shape.
- Check all your credit reports. 1 in 5 people find some sort of error on their reports. So find the errors up front so you can get them fixed!
- Have any inconsistencies corrected and pay past due balances. Make your report look clean and mortgage READY.
- Make sure your current balances are less than 50% of your available credit – debt utilization is important to your score – so speak with your lender or financial advisor to get your accounts in check.
- Close old or inactive accounts- these can be a huge fraud risk and contain out dated information.
- Once you have cleaned up your report, set up automatic payments to avoid future late payments – on time payments are a great way to start improving your score.
- If you have late payments on student loans – you may be able to work with the lender to remove these from your credit score (I DID).
- Do not apply for credit at any point while getting approved for a mortgage. Lenders pull credit at all points from the beginning to right before closing. Additional purchases can be a detriment and sometimes cost you the loan.
- Finally, be patient and prepared to wait 6-12 months to see an improvement on your score.
We recommend seeking out a reputable lender on the front end – they will be able to act as a financial advisor to help you get your credit/accounts ready to buy a home! You may be VERY surprised that you are able to buy a home sooner then you think – or even know. And if not at least you will have a plan!
Contact Nashville on the Market for any questions or feedback!
