If you’re purchasing a home, you already know that lenders want to make sure you’ll be able to pay back the amount they give you — and they’ll do quite a bit of research before they’ll approve you for a loan.
You don’t have to have perfect credit to qualify for a loan. In fact, every situation is different. However, it’s always a good idea to “brush up” your credit and improve your scores as much as you can before you apply. The better your credit score, the better the rates lenders will extend to you.
It’s best if you talk to several lenders before you apply with one to ensure you’re getting the best possible terms.
How to Get Your Credit Report
Before you can develop a plan, you’ll need to know exactly where you stand. The Federal Trade Commission suggests obtaining a copy of your credit report through AnnualCreditReport.com. Federal law allows you one copy, free-of-charge, each year.
When you have your report, go through each item to make sure everything is correct. You can report bad information to the credit bureaus and ask them to remove it, which may improve your credit score.
Improving Your Credit Score
One of the easiest ways to improve your credit score is to pay down debt.
Lenders typically want you to use less than 30 percent of the credit you have. For example, if you add your credit limits together and you come up with $10,000, lenders would prefer to see that you’re carrying less than $3,000 in total balances.
In some cases, it’s best to consolidate debt that’s on multiple credit cards. Determine which of your cards have the highest limits and the lowest interest rates; it may be a good idea to combine all your smaller debts together on one or more of these cards to show lenders you’re not close to “maxing out” any one card.
Are You Buying a Home in Williamson County?
If you’re thinking about buying a home in Williamson County, we can help.
Call us at 615-473-5973 or get in touch with us online to let us know what you’re looking for in your next home. We’ll help you find it.