Your Credit Score Can Make a World of Difference When Buying a Home

When you choose to buy a home in Mesa, the most important number to look at is your credit score. A high credit will help you secure a good loan at an affordable rate. That means more house for your money. Is your score high enough? Every lender has different policies regarding credit scores and the rates they charge, so it’s wise to shop around and determine what your credit score earns for you. Remember that your credit doesn’t just affect the approval process, but it will also reflect your interest rate. A high credit score will keep that pesky rate low and under control. A poor score will raise the rate, as the lender figures you’re more of a credit risk.

What goes into your credit score? The short answer: Just about everything. One thing that is for certain is that your score is altered by utility payments, credit card accounts, student loan payments, cell phone records and mortgages. Essentially, every monthly payment you make will adjust your credit score in one direction or another. Your credit report will show where you stand on these payments and if something is in collections, outstanding, or just late.

Any sort of blemish on your credit report can damage the chances of pulling down the loan you want at a rate you can afford. It makes sense to check out your credit report and then spend the time necessary to wipe out any incorrect, outdated, or generally nasty items that turn up in your finances. You should do this on a regular basis, but most certainly a few months before you go looking for a home. It may take some time for the changes to click over and be corrected at the credit companies.

You’ll also find a listing on your credit report of whom else has requested it in the recent past. Too many requests in a short time can lower your credit score, presumably on the theory that you’re shopping around after having been denied. The report will also list the various credit accounts in your name and what balance those accounts carry. This is very useful if you suspect identity theft.

A Good Payment History Keeps Your Credit Strong

When you’re trying to pin down a loan, the first thing the lender will look at is the payment history on your credit report. Almost a third of your credit score comes from paying your bills on time. Of course, not all bills count the same. If you have forty timely accounts and then one late payment your score will not be greatly affected. Stay current with your revolving accounts such as credit cards and department store cards. Carrying a balance higher than roughly half your available credit amount has the potential to harm your credit score. Before you search for a home, ensure that the remaining balances on your current cards are in good standing and always pay off any late bills.