The moment you sign on the dotted line and officially become a home owner is one of the most gratifying times in life. Although it’s not always important to have perfect credit, most lenders will approve a loan, set interest rates or outright deny an application primarily based on your credit score. Due to this fact, any future home owner should understand the importance of credit reports and how they factor into the process of applying for financing a home in Corpus Christi. Even if your credit score isn’t the best, there are several ways you can fix bad credit in order to qualify to buy a house.
Here are four important tips that will help you have a clear understanding of where your credit currently stands, and steps you can take to improve your credit score.
Discover your Credit Rating
Before you can make repairs to your credit, it’s important to start with a baseline. This is accomplished by contacting the three primary credit agencies that most lenders in Corpus Christi use to approve a mortgage application. Equifax, Experian and TransUnion are required by US Federal Law to provide a consumer with a free credit report annually upon their request. In order to expedite this process, it’s a good idea to visit AnnualCreditReport.com where you can order all three reports directly.
Although the annual credit report is free, these credit agencies will charge a nominal fee, ranging from $7.00 to $10.00 to provide you with their credit score. The detailed credit report from each reporting agency will document any open credit accounts, credit accounts that have gone to collection, or negative credit information that is linked to your individual social security number. Having access to this detailed information will provide you with a starting point in which to make repairs to your credit. If you’re having difficulty accessing your credit report, there are many home builders in Corpus Christi that can help you gain this valuable data.
Investigate Mistakes and Contact Creditors to Make Corrections
Believe it or not, credit reports are not 100% accurate. In fact, a 2015 study completed by the Federal Trade Commission revealed that one-quarter of all credit reports has errors that negatively impact a consumer’s credit rating. This is why the US Federal Government established the Fir and Accurate Credit Transactions Act, which states that if a credit reporting agency or creditor is proven wrong, they must make the corrections to an account within 30-days of notification; at no charge to the customer.
According to the FTC, the most common errors found on a credit report include:
- Identity Errors: With over 50 million United States citizens with active credit reports on file, simple mistakes in filing can; and often will occur.
- Incorrect Account Details: The credit agencies are not only ones that can make a mistake. In fact, it’s common that creditors miscalculate your credit information, activity, account balances, credit limits and more when they report your information to the big three credit agencies.
- Fraudulent accounts: Identity theft is growing in the United States. Fraudulent accounts that appear on your credit report will impact your credit ratings and can disqualify you for many loans.
Once you receive your credit report in the mail or review it in detail online, take time to read every section and verify that the information listed on your credit report is accurate. If you find an error, contact the creditor listed on the report and the credit bureau as soon as possible so you can rectify this situation.
Manage your Existing Debt
Outside of negative history on a credit report, consistency of payments to creditors is a major factor that impacts an overall credit score. This is why it’s suggested for any future home owner to consolidate their debt or create a plan to pay off that debt as soon as possible. Many debtors, especially banks that you have established a relationship with are willing to restructure or refinance existing loans in order to help you improve your credit, especially if you’re in the process of applying for financing a home in Corpus Christi.
There are also many non-profit organizations that can help you to create a debt repayment program that will establish good financial habits without significantly impacting your day-to-day living. The National Foundation for Credit Counseling is a great resource for people looking to manage their existing debt.
Consider Credit Repair Financing Programs in Corpus Christi
If you’ve completed your due diligence and accomplished each of the first three steps listed above, and still are having difficulty obtaining a housing loan, there are solutions. One of the quickest growing programs available to individuals with less than perfect credit are credit repair programs in Corpus Christi designed to assist future home owners improve their credit scores, which can significantly reduce their down payments and interest rates. Once you take the time to meet with a credit repair specialist, they will complete a free customer profile assessment that will outline a plan that ensures all money invested is applied towards your down payment.
Nobody is perfect; especially when it comes to our credit numbers. However, when you take time to review the facts, it’s easy to realize that buying a home with bad credit, especially when you’re dedicated to improving your lifestyle and that of a family is very possible indeed.