Credit Tips for First Time Homebuyers
First Time Homebuyer sounds scary enough without delving into the details of first time homeownership. It would be rather elementary to say that ‘Credit is extremely important’ unless you come to the table with tons of cash and not financially challenged in any way!
For those of us who need to purchase a home utilizing the conventional method of obtaining a mortgage, we need to be very aware of what goes on our Credit Report. The Credit Score will play a major role in the qualification and the interest rate of your hopeful mortgage assistance.
According to The National Foundation for Credit Counseling, 44% of Americans have not reviewed their credit report during the past 12 months; this is not a good indicator or responsible financial guardianship.
Credit utilization is the metric used to generate credit scores; activity is excellent but growing outstanding balances on credit cards could be detrimental. As a general rule of thumb, revolving debt is bad! Real estate, Auto & Installment loans are generally acceptable as a normal way of life as long as the balances are declining each month and all payments are paid on time.
Many successful people have had times in their life that cash flow was of great concern, many of these same people have excellent credit scores and have never had a late payment recorded. Successful people respect their financial profile and don’t let a temporary glitch upset their record, thus many have borrowed from one credit source to keep the payments on time for the other accounts. As long as this is a temporary scenario, everyone wins and the consumer’s financial goal is met! In summer of debt balances, the scoring metrics heavily view the ratio of outstanding balances to available credit.
It is helpful to clear any misconceptions that the general public may have about credit scores; many consumers believe that age, salary, and employment history are included in credit calculations, this is not the case. Lengthy credit history of no late payments, minimal credit inquiries, paying down balances and a healthy available credit ratio will produce the excellent credit score that responsible consumers deserve.
Those with the best credit will be deserving of the lowest available money rates. A credit report is much easier maintained than repaired and we’re hopeful this article will help a little!