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WHAT YOU NEED TO KNOW ABOUT YOUR
CREDIT BEFORE BUYING A HOME
Sometimes being approved for home buying can be difficult however, there are things you can do to be approved.
Things you should know before you venture out to buy your home:
- Payment history - No matter what type of loan you apply for, one of the first things any lender will look at is your payment history. If you have made payments on time and even paid off loans early, that is a bonus.
- Create a budget - Before you even apply for a loan, know what you can afford and what you spend your money on. Being on top of your finances will help you in getting the loan and help keep you track once you have purchased your home.
- Clear up debt - All lenders look at your credit a little differently but one red flag is a borrower who has too much debt. Before applying for a loan, consider paying down, or even paying off, credit card or other unsecured debts. Lenders use various debt to income ratios to determine your eligibility. Having less unsecured debt is always a positive.
- Do not apply for more credit - Some potential buyers make the mistake of trying to balance out their debt to income ratio by applying for more credit just before applying for a loan. Having numerous inquiries or lots of "new" credit on your credit report can look suspicious to a lender and could hurt your chances of being approved for a loan.
- Know your credit report - A`federal law passed a number of years ago allows anyone to pull their credit report for free each year. Know what is on your report before speaking with a lender. Clear up any discrepencies or mistakes. This can be difficult but is very important to improving your score.
- Less than perfect credit?
It is still possible to get a loan for a home with bad credit. You will need to work a little harder, though.
- Get on track. Show that you are on track by making payments and staying current. Contact your debtors and arrange payments or even request lower interest rates or a reduction in the debt you owe.
- Do not acrue more debt! It is not wise to put more debt on to your credit cards or get additional loans (secured or unsecured) just before trying to get a home loan. You will need to prove to a lender that you have the ability to make your home payments and adding additional debt will cause a lender to be concerned.
Contact us for a recommendation to a reputable local lender who can answer all of your credit questions! | 
