Sage Realty Discusses How Credit Scores Work for Buyers Seeking Main Line Homes for Sale
When you are ready to look at Main Line homes for sale, your credit score is a factor in the type of mortgage you can acquire. What factors influence your credit score and how can you make sure yours is healthy? Sage’s Main Line Realtors® offer some tips on how credit scores work.
If you are unaware of your credit score, when you start thinking about buying a new home one of the first things you should do is review your credit report. It is best if you have identified a lender at this point who can pull the report and talk you through the jargon. Look the report over and make sure that all of the information is accurate. If you see inaccuracies or discrepancies, contact the credit reporting company to start the process of corrections. You can also begin working to improve any trouble areas.
General Tips for Improving Your Credit Score
Pay Your Bills on Time
Whether you have medical bills, credit accounts or car loans, pay them on time. Paying late once can likely be explained pretty easily without too much damage to your credit. However, habitual late payments, even only a day late, can have a major impact on your credit score.
Limit Credit Card Spending
Keep your credit card spending to around or below 30% of the maximum and pay them off in full each month if possible. If you have high balance cards showing up on your report, try to pay the balances down.
Minimize New Credit Accounts in the Year Leading Up to Searching for Main Line Homes for Sale
Too many “hard” credit inquiries can hurt your credit score. A hard inquiry, which occurs when you apply for a new credit card, stays on a credit report for two years. However, these types of inquiries typically only impact your score for one year.
A soft credit check, which occurs when a consumer checks his/her own credit score, has no negative impact on credit score. In fact this type is recommended with today’s growing concern of identity theft. When you do begin to look at mortgages, try to keep the inquiries within a window of 30 days or less to minimize impact on your score. The reason for this window recommendation is that FICO ignores inquiries made within the 30 days of your mortgage loan, so if you apply for a loan within that window, your score will be unaffected.
Work on Fixing Negative Issues or Inaccuracies
You may find that your credit report contains errors. Those can be fixed but could take some time. Contact the creditors directly, and they can send letters to the credit reporting agency or make corrections. For legitimate negative issues, try to work out a solution with the creditor. If you are unable to make progress, you may want to contact a credit counselor for issues that have major impacts on your score.
The good news is that you may qualify for a good mortgage rate with a lower credit score than you think. Many people think you have to have a perfect credit score to buy a home. Though you will get a better interest rate for a higher score, you could qualify for an FHA loan with a credit score of 580 or higher. According to the Lenders Network, 680-739 is the typical range for homebuyers, but some factors, like a high down payment, could help mitigate the need for a higher score.
Call Sage When Looking for Main Line Homes for Sale
Sage Realty offers knowledge and experience to our clients, making the buying process much less complicated to maneuver. When you are ready to look for Main Line homes for sale, call Sage to learn about available homes and to ask questions about how to qualify. Contact us today for a consultation!