One of the largest, most fulfilling purchases a person can make is a home. When the time comes to make the leap, when you’ve found your dream home, or starter home, or whatever the case may be, you’ll want to look credible to as many lenders as possible. This is where your credit score will come into play. Having good or bad credit will constantly determine your ability to take out loans of all sizes for all types of things. This week we’re going to start a multipart series that will teach you the process of Building Credit for San Antonio Home Buyers; the credit needed to buy a house. We will start with the basics.
Simply put credit is any amount of money that you borrow, or have borrowed, it’s a running tally of all of your loans, credit card debt, and unpaid bills. Your credit score is a report of how well you pay things off. It gives bank or company you’re seeking to borrow money from an idea of how reliably they can expect you to pay it back to them on time. A good score will usually result in banks and other agencies, constantly offering credit cards or loans. However a bad credit score makes it very difficult to take out a loan of any sort, whether that’s a line of credit at a bank, a credit card, a car loan, and especially a home mortgage.
There are quite a few credit reporting agencies, however there are three popular ones, they are Experian, Equifax and TransUnion. The first piece of advice in building credit is to make sure that all the habits that make you a good borrower are reported to them. This may involve doing a bit of research, or asking a few questions, but once you’ve vetted your lenders, there are a few basic things you’ll need to do to develop and protect a good score. Also, you should know that you can obtain a free copy of your credit report from these providers, simply go online to their sites.
The simplest way to establish credit is by consistently borrowing money, and paying it back on time, with a credit card. If you don’t have one already, the best place to get one is through a bank that you already have an established relationship with, they will usually be more willing to work with you because of your relationship with them. You can usually just walk right up to them and ask for one, but when you do make sure that it is a major credit card, from Visa, Mastercard, American Express, or Discover.
If you are denied a credit card, apply for a secured credit card. A secured credit card usually involves taking some small amount, usually less that $1000 and giving it to the bank. They will establish this amount as your credit limit, and give you a credit card, and use your deposit as collateral. After six months to a year, the bank will release your deposit back to you, and you will have received the benefit of building good credit, and since the lender will usually want to keep you as a customer after that point, expect to see offers for a credit card sometime during or after this.
At it’s most basic level credit is just a measure of how well you pay back the money you borrow. Paying that money back on time is good, and if you do it enough, you will slowly build a good score. However, missing payments, for anything is almost always reported, even if the company doesn’t report the payments you make on time, so the best way to protect your credit score is to pay bills on time.
As always, if you have a problem property or are in over your head and need to sell your house fast in San Antonio to avoid foreclosure or for any reason, we at iClose Homes, Inc. may be able to help. We are not real estate agents and do not charge commissions. We can make a fast offer, have the ability to close with cash and can pay closing costs. Give us a call at (210) 588-9999 or complete the short form here:
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