When you are looking to buy a home whether now or in the future, it is important to be a smart consumer. It is important know a few things about credit, you and how it affects the ability to purchase. Here are a few things you should know about in order to have a good credit report.
1. Make sure you regularly get a copy of your credit report, usually about once a year. If there is something on there that shouldn’t be, then you can quickly fix it so that it does the least amount of harm. There are several credit agencies from which you can get it , Experian, Equifax and TransUnion are the most prominent companies.
2. Know your credit score. The number on your credit score translates to what kind of interest rate you will get. the higher the score the better the interest rate, whether on a house purchase, buying a new car, or even on your credit cards.
3. Make sure that every time you apply for credit the information is the same and complete. Consistency is the key to smooth transactions and less headaches!
4. Live within your means. Set a budget and live within it. This is the best way to not over extend yourself credit wise.
5. Use credit wisely. A little bit goes a long way is a great motto when it comes to using credit. It is best to have a little bit of credit, too much can reduce your credit score.
6. The early bird catches the worm. Pay your bills on time or even early. Paying late can have a detrimental effect on your credit score.
7. Keep the balance low, or better yet, pay it off every month! If you have a very high balance you are carrying, it looks like you are leaving beyond your means and might be a higher credit risk.
8. The more you apply for credit, the more hits your credit report gets, the lower your credit score will be. It can also look like you are living on too much credit if there is too much activity.
These ideas and more can help you keep your credit score good, or take it higher, thus helping you to qualify for the loan you want and purchase the home you want!