Get ahead of potential financial issues that may slow you down
We advise home sellers to declutter before showing their property–remove extraneous items, organize, put personal items in storage and stage the home so that buyers can see themselves living there.
To realize buying that property, buyers can also declutter–their credit history. In addition to larger down payments, lending institutions want to lend money to people who are good risks, are financially responsible and can handle a loan over the long haul.
There are several actions you can take to begin straightening your credit history house. First, pay your creditors on time every month. This includes any current loans, credit cards, utilities, department store accounts and student loans. You should pay off any accounts in collection and any state or federal tax liens. If you are thinking about making a large purchase or changing jobs, hold off until the home buying process is settled.
Also, don’t pay off or close credit accounts in good standing. Credit scores are optimized when they show you have credit available to you and are responsible in how you use it.
Next, check your credit score. This is a number that represents your calculated measure of credit risk. The higher your credit score, the more favorable your loan opportunities and interest rates will be. You are rewarded for being a financially responsible person. Three national consumer reporting companies–Equifax, TransUnion and Experian–have developed AnnualCreditReport.com for free reports. You are entitled to a free report once a year from each of these companies. The Federal Trade Commission also has very useful information on credit scores, scams and how to repair a credit score.
Review each report to make sure the information is accurate. Small technical errors can make a serious impact on your credit score. Look for inaccurate dates and any delinquencies that should disappear after seven years. Other inaccuracies can include balances listed as higher than they truly were and limits listed as lower than they really are.
To dispute any information on your credit report, write a letter to the company providing the report, explain your reason for your challenge and include copies of supporting information that will validate your claim. You can also begin the process with a phone call or online. It’s also a good idea to contact the creditor in question and work with them to resolve the situation.
Your efforts will pay off with the home of your dreams.