First-Time Homebuyers and their credit score

Aol.realestate recently published tips for first time homebuyers. One of the things discussed was fixing your credit. In my opinion, this is a very important thing that every homebuyer should do. The good news is that you can do this yourself (see How to raise your credit score for free).

Here is an excerpt from the article:

Fix Your Credit
The first step toward buying a home takes place months before walking into your lender’s office. It’s crucial to check your credit score at least three to six months ahead of your mortgage application, says Rod Griffin, director of Public Education at Experian. You can request a free copy of the report from each of the three credit bureaus (Experian, TransUnion and Equifax) at annualcreditreport.com.

Even if you don’t have sterling credit (generally a FICO score of 720 or above), the most important thing to do is to take stock of what the figure means. “Every score is educational,” says Griffin. “It’s more about why the number is than what the number is.”

This is especially true since there are different proprietary scales used to gauge credit: the Vantage score, for instance, ranges from 501 to 990, while the FICO score runs from 300 to 850. Make sure to read the accompanying credit report to understand what your score actually means. It’s also important to check for errors in the report, which can have a negative effect on your credit, and ultimately, your mortgage rate. One in four reports has an error serious enough to prevent homebuyers from getting credit, according to the U.S. Public Interest Research Groups. So get your reports well in advance of the house hunt.”

I would also suggest that during the 3 to 6 month time frame you should make an effort to pay down your existing debt. Paying down your existing debt will not only help improve your credit score, but it will also make a difference with the amount of money a bank is willing to lend you.

At Bayview Estates Realty, we believe in putting people before profit. We also specialize in assisting first time homebuyers in finding a home that fits their needs. If you are interested in selling, buying, or renting a home, please feel free to contact us at 516-777-0146. Thanks for stopping by!

Sean Jay Bennett of Bayview Estates Realty is here to assist you. Please call Sean directly at (646) 269-3054 for more information about the first time homebuyer process.

Read the full article here.

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