The first thing you have to do when you decide upon buying a house is cleaning up credit. It might take a while, it might take some weeks, but without doing that you will only be subject to extremely high interest rates and huge monthly payments, so unless you want that, read on about how to clean up your credit so you can buy your dream house!
You’re probably asking yourself “Why is it important to clean up my credit?”. Your credit report is the very first thing lenders open as soon as you ask for a loan. Not only that, but your credit report contains all the information necessary for the lenders to precisely set your credit score. Of course, anything that’s negative on the report will have a negative effect on you, that probably goes without saying.
That small negative fact will have the power to make the bank deny your application and ruin your dreams of waking up to the sounds of the sea.
You’ve probably figured out that your credit report contains a lot of information about everything you’ve done with the card. It keeps your payment history and sees how much debt you’ve paid and how much it’s left. Things like utilities as well as your car insurance are also added to the equation of making your credit score. Every aspect in which you have used your credit card will show up on that report and will have an effect on your application.
Late payments and too many credit cards have the capacity of ruining your dreams of buying that house in a flash.
So, in order to make sure that everything will run smooth and if everything looks good, you will have to go and make a request to the three credit bureaus to give you the report (which you can request once a year) so you can see and analyze your situation. One thing to always take into consideration is to be careful and look closely at your payment history. People are writing down that information and they, same as us, can do mistakes, believe it or not.
It was actually found that 90% of the credit reports had some problems, big or small. It might be a social security number or they confused you with someone with the same name as you, it doesn’t matter as long as you spot these issues and are willing to solve them.
In light of all these facts, what is the credit score you MUST have so you can have a chance at getting a house?
650 is the score where you’re somewhere in the middle. Depending upon your lender you might or might not get that loan. But, if you have a clean payment history and always paid your debts in time, you will most than likely get a loan with amazing benefits!