Home Buyer Beware: Manage Your Credit Before it Manages You
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(ARA) - Making an offer on the home you and your spouse have dreamed about
should be exciting but, in reality, it can be one of the most stressful
decisions for a couple. Discussions about household finances and preparation for
major purchases can be particularly stressful. To minimize stress, couples
should take a comprehensive look at their finances and how their credit
histories and scores impact purchasing power. According to Robin Holland, senior
vice president of Consumer Services for Atlanta-based Equifax, “Your credit
history may have a serious impact on mortgage rates; low scores can ultimately
cost home-buyers thousands of dollars over the lifetime of their loan.”
When preparing to buy a home, consumers should take a proactive approach to
ensure that their credit is in the best possible condition. Consumers who do
their credit homework will be well positioned to secure the best loan rates
available relative to their situation. Plan ahead and don’t wait until it’s
time to make a major purchase -- now is the time to get serious about your
credit. Follow these helpful steps to make sure your credit is in order before
you spot your dream home.
Five Tips for Managing Credit Scores
Monitor your credit status. The best time to work on your budget or credit
score is before you are ready to buy. Continual credit monitoring will help you
ensure that your information is accurate by keeping you informed of any changes
in your credit file. Keep in mind that your credit score is based on your
history of borrowing and repaying money and changes do not take effect
immediately. Even if you have a good score, proactively managing your credit is
important and may result in a better score in the future. A better score can
mean better rates and cost savings when you borrow.
To help eliminate the guess work, consider a tool such as Score Power
(available at Equifax.com). Score Power allows you to easily view your credit
status and understand how lenders view your credit. You can also use Score Power’s
Interactive Score Simulator to show how your actions may impact your score in a
positive or negative way. ScorePower also provides a list of specific tips on
how to manage your score and compares your score to the national average.
Don’t overdose on credit cards. Avoid opening new credit cards that you
don't need just to increase your available credit. Applying for multiple credit
cards over a short period of time, or for a card you're not likely to get could
backfire and actually lower your score. Apply for new credit accounts only as
needed.
Maintain the balancing act. Try to keep your total account balances as low as
possible. High outstanding debt may negatively affect your score, as you have a
greater chance of missing payments.
Eliminate Errors. Correct any inaccurate information that might appear on
your credit report.
Be on Time. Take special care to make all of your payments on time. Always
pay your mortgage first. If forced to miss a payment, be sure to pay your credit
cards the following month. Accounts that are more than 30 days past due will
appear on your credit report. If you have missed payments, get current and stay
current. The longer you pay your bills on time, the better your score.
For more information about how to better understand and manage credit, visit
www.equifax.com.
Courtesy of ARA Content
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