Andrea Kenney - KELLER WILLIAMS REALTY / Metropolitan



Posted by Andrea Kenney on 9/17/2018

When you want to buy a home, you know that good credit will be necessary. You may have heard some things about your credit score that just arenít true. Read on to set the record straight on some of the most significant misconceptions about credit. 


Checking Your Credit Only Gives You Knowledge


Checking your credit score or report will not lower your score. The only way checking a score is damaging to a credit score is in the form of credit inquiries. This is when a lender, employer, or other merchant checks your credit in order for you to either gain employment or open a new line of credit. You have the right to review your score without it being impacted. 


You Shouldnít Carry Balances


The best way to keep a high credit score is to use a credit card and pay the balance off in full each month. Itís a false belief that carrying a balance is an excellent way to increase your credit score. You need a low debt level to maintain a good credit score. 


Your Age And Income Have Nothing To Do With Your Score


Itís natural that older people who have a longer credit history have a better shot a good credit score, but your age has nothing to do with your score. It all depends on when you established credit. Some people started their credit histories early because their parents opened accounts for them. Others needed to wait awhile before opening their first credit card account. 


Your income also is not a factor in determining your credit score. It may be true that if you have a higher income, itís easier to stay out of debt, but the amount of money you make has no direct impact on your score. 


You Cannot Access Your Credit Score For Free


You have a legal right to obtain a free copy of your credit report once a year but, your credit score isn't included in this report. There are free services that are outside of your credit report that will give you your credit rating, but you need to search for them. Itís a good idea to check your credit report periodically, but you should also know your score especially if you're getting ready to make a big purchase such as buying a home.


Your Credit Matters More Than You Think


While you know your credit score matters when you head to get a home loan, you may not know just how many entities take your credit into account when you apply for them. Some things you may do where your credit score matters:


Apply for a job

Apply for a credit card

Rent an apartment

Sign up for phone and Internet services

Get other utilities in your home


Your credit history gives a picture to the world to let them know if youíre financially stressed. If you have gone through rough patches, there are always ways to bring your score up. If you had a judgment ruled against you in a lawsuit, for example, that would only appear on your credit report for a certain number of years. Lenders will often allow you to explain bumps in your credit report as well. Understanding credit is half the battle to a good score!      




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Posted by Andrea Kenney on 12/25/2017

Your credit score is a 3 digit number that can have a huge impact on many things that you hope to accomplish in your life. One of the biggest reasons that you need a good credit score is for buying a home. As many people rely on credit cards to fund their expenses, they consequently end up in debt. This doesnít have a favorable impact on credit scores. Yet, itís so important to maintain good credit.  


Why The Score Is Important


A credit score is one of the most crucial factors in determining if you can qualify for a mortgage. It is an overall gauge for lenders to understand how financially responsible you are. The higher your credit score, the less risk you carry in the eyes of lenders. 


What Affects A Credit Score?


Your credit score is calculated based on information that is found on your credit report. There are five different things that affect your credit score, each with a slightly different impact:


  • Payment history
  • Debt-to-credit utilization
  • Length of credit history
  • Credit mix
  • New credit


Whatís A Good Score?


Absolutely flawless credit is 850. Donít worry if youíre not in that category. Only about 1/2 of one percent of consumers actually have a score this high. Once your score reaches 740 and above, youíre able to qualify for the best in mortgage rates. Even if your score is in the low 700ís, you still should be able to qualify for a good interest rate. For a conventional loan, many lenders look for a credit score of 620 and above. Being in the high 600s will help you to avoid the need for additional paperwork. Youíll also get a decent interest rate with this score. 


What If You Donít Have Credit History?


Ideally, you would have opened some type of a credit card by the time you reached the age of 20. This would help to establish credit. If you donít have any type of credit history, thereís still a few ways that you can qualify for a mortgage. In these cases, lenders will often use alternative sources in order to determine the reliability of a party theyíre lending to. Your car payment history doesnít show up on your credit report, but a good track record helps lenders to see that youíre dependable and a responsible credit user. 


What About Bad Credit?


From missed payments to errors on your credit report, there could always be some problems with a credit score. The good news is that bad credit can be fixed. There are even loan programs designed to help people with less than perfect credit scores. Generally FHA (Federal Housing Administration) loans and VA loans allow for low down payments and have lenient credit score requirement. 


Fixing Your Credit Score Is Fixing Your Habits


In order to repair your credit score, youíre going to need to fix the bad financial habits that got you into the situation in the first place. This means making on-time payments, spending less, and avoiding opening up any new accounts. Pay down your existing debt and try to make a fresh start form there. Also, be sure that you obtain a free copy of your credit report each year to keep on top of any errors that might be present on the report.







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