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Improve Your FICO Score Before Shopping For Homes For Sale
t always is exciting to credit report.
begin looking at homes for
sale in your area, bigger Payment History
and perhaps nicer than the
property you currently own. Your payment history accounts for
Before you let the excitement 35 percent of your FICO score and
carry you away and make an offer has the biggest impact on
for homes for sale, first check purchasing homes for sale. It
your FICO score to ensure you can covers your timeliness of
purchase homes for sale at the payments, bankruptcy, liens, wage
best rate. garnishments, collections,
delinquent accounts, and the
If your score is below 600 for severity of the delinquencies
any reason, you need to take all very important data to the
corrective action. Better to put homes for sale lender. Do the
off looking for homes for sale, following to improve your payment
until you can purchase one at a history:
good rate. Otherwise, you will be
paying thousands more than Catch up any delinquent bills
necessary for your homes for sale and make them current. Begin with
over the life of the mortgage. A the revolving credit accounts and
score below 600 puts you at a then the smallest to the largest
disadvantage with homes for sale account balances. Then, stay
lenders; but with dedication and current.
lots of effort on your part, you
can improve your FICO score and Begin paying all bills on time.
get the better mortgage rate and
terms for your homes for sale. If you find yourself having
This article gives you ways to financial problems, contact your
improve your FICO score and your creditors immediately before
you are late on payments. They percentages are negatives to
can help you with temporary homes for sale lenders. At the
remedies that may not impact your most, 75 percent is barely
credit rating. If you are truly acceptable to the homes for sale
in debt and do not know what to lender; 35 to 25 percent is best.
do, contact a reputable credit So, pay down your total debt to
counselor, generally a nonprofit improve this ratio, lowering your
firm, to help you learn to manage credit card debt first.
your finances responsibly.
Pay off your debt. Do not just
Even after you pay off collection move it around. The
accounts, they may impact your debt-to-credit ratio makes it
ability to purchase homes for useless to move what you owe from
sale. They will remain on your one credit to another.
credit report for seven years.
Leave unused credit card
Total Amount Owed accounts open, especially when
This accounts for 30 percent of they show a good credit history
your FICO score, a big factor in the past. Close them and you
when buying homes for sale. It do two things (1) raise your
covers how much you owe and how debt-to-credit ratio by lowering
many of your credit lines are your credit availability, and (2)
being used. Improve this area by: it wipes out the history for the
cancelled accounts, if no
Keeping your debt-to-credit balance.
ratio low. Otherwise, if you have
a total credit availability of Do not open new credit card
$20,000, for instance, and total accounts just to increase your
owed of $10,000, then your ratio credit availability level,
is 50 percent. High ratio especially if you do not plan to
use them. Too much credit Avoid offers for new cards. Too
capacity is as high a risk to many credit cards make homes for
homes for sale lenders as a high sale lenders see you as a
ratio. disaster just waiting to happen.
Length of Credit History Additionally, the longer you
pay your bills on time, the more
How long you have been improvement you will see in this
establishing credit accounts for sector of the FICO score.
15 percent of your FICO score, as
well as how active your accounts New Credit
have been. Do the following to
improve this section before New credit accounts for 10
buying homes for sale: percent of your FICO score. It
covers how many new accounts you
Do not open a lot of accounts have opened and what types of
too rapidly. It will lower your credit lines they are, as well as
average account age, especially how many recent inquiries have
if you have established credit in been made against your credit.
only the past few years. It also These are inquiries initiated,
makes you look risky to homes for because you attempted to secure
sale lenders. credit (for example, you applied
for a credit card whether the
If you have older accounts that application was rejected or
you do not use, consider making accepted). Improve this segment
small purchases and paying them by:
off within six months to continue
building a positive credit Rate shopping for credit within
rating. a focused period of time of 14
days or less. When looking at
homes for sale, many people any installment loans, and so on.
check out loans over a long Improve your credit mix by:
period of time, especially if
they are not in a hurry to buy. Having one or two credit cards.
It makes it look to homes for It is ironic that homes for sale
sale lenders as if you are lenders are leery of people who
constantly looking for more do not have credit cards.
credit. Ensure the inquiries show
up on your credit report within a Installment loans (for example,
short span of time, so that homes a car loan) is better than
for sale lenders know you were revolving debt (such as,
shopping for a single loan. open-ended credit cards).
If you need to re-establish Certain finance company debts
credit, open one or two accounts (such as buying a large appliance
only. Then, manage them from a retailer with in-store
responsibly by keeping the financing) can lower your FICO
purchases small, the account score.
balance low, and make your
payments on time. Also, pay at A good credit mix shows you can
least a bit more than the minimum handle multiple credit lines
payment. responsibly and usually includes
one to two credit cards, one
Type of Credit department store card, and an
installment loan. If you try to
Another segment that accounts for enhance your credit mix, remember
10 percent is the type of credit to do so slowly over time;
accounts you have. This includes otherwise, it becomes a red flag
major credit cards, retail cards, for the homes for sale lender.
mortgage, equity lines of credit,
Closing undesirable accounts Improving your FICO score before
does not drop them from your looking at homes for sale ensures
credit report. If you have a that you will pay a lot less
balance or have shown a late money over the life of the
payment history, they remain and mortgage. It is worth the
continue to be used as part of dedication and effort required.
the FICO scoring.
About the Author:
John Harris is an expert researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more information please visit San Diego Homes for Sale
Read more articles by: J Harris
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