Your credit score will have a major impact when it comes to
the cost you wind up paying for a Charleston mortgage. A buyer with a high
credit score of 750 or above will qualify for the most competitive interest
rates available; but today’s tightened lending standards mean that some
borrowers with scores under 600 may not qualify for a mortgage at all. And no
matter what, a low credit score can mean paying an extra 3%-4% interest charge on
every payment.
There is nothing permanent about a credit score. Charleston,
SC homebuyers who realize its importance—and who take early steps to improve
their own—can save literally thousands of dollars.
1. You
can’t improve your credit score until you know what you are working with. Your
first step is to obtain your credit
reports. They are available for free once a year from each of the three
major reporting agencies: Equifax, Experian and TransUnion.
2. The
fastest way to improve your credit score is to correct any inaccuracies.
Because this takes time – anywhere from 30 days to as long as six months, the
earlier you begin the process, the better. To remove items that are incomplete
or inaccurate, verify the correct information using the dispute procedure on
the agency’s website. The creditor has 30 days in which to validate the debt;
if the credit agency does not receive a response to your claim, they are required
by law to remove the entry from your report. Remember that there are three
major agencies, so an incorrect item may appear on all three— and all three
need to be contacted.
3. If
you have an older credit card that you haven’t been using for a while, it’s a good
idea not to cancel it; even to use it now and again, paying the balance in full.
This will mean that the issuer keeps reporting information to the credit bureau,
which can be valuable. A longer credit history improves your credit score.
4. A
low credit utilization ratio measures
how much of your available credit you are using. In order to improve your
credit score, keep your credit utilization ratio below 20%. One way to quickly
improve a utilization score is to move credit card debt onto cards with higher
limits. While this will not make a difference to the amount that you owe, it
will alter individual cards’ credit utilization ratios.
5. Consider
a Personal Loan. If you have a family member or friend that you can
borrow from, consider taking out a loan in order to pay down a portion of
existing debt. By removing some of that debt, you can give your credit score a
boost.
6.
Moving away from being measured as a poor
credit risk has the biggest impact on whether a future mortgage is approved—and
how much interest you wind up having to pay. Your credit score in Charleston,
SC really matters! If you would like an introduction to a mortgage broker to
begin the conversation about the home loan your current credit score qualifies
you for, contact me today.
Interested in selling your Charleston area home? Visit: www.jeffcookrealestate.com
-Jeff Cook
Jeff Cook Real Estate
Charleston, SC
No comments:
Post a Comment