6 Tips: How to Rebuild Your Credit and Buy a Home

Money hand outHave you faced some financial difficulties in recent years but you still want buy a home?  Here are some tips to help your purchase the home of your dreams:

Order your credit report. Under federal law, you are entitled to one free credit report each year from all three credit-reporting bureaus: Experian, Equifax and Trans Union. One resource we prefer is the link to Annualcreditreport.com. Simply request your free copy, which you can access within minutes online or elect to have it mailed to you. Your credit report will give you your payment history – the good and the not so good. You want to make sure you check for any errors and report any inaccuracies.

Order your credit score. Next, you’ll want to to do is obtain your credit score, the three-digit number representing the quality of your credit record. When you order your score, you will be given specific tips on how to improve it. Consider this your action plan; these are the things that will help you improve your score the most. You can order your score from any of the credit-reporting bureaus, or from credit-scoring company Fair Issac.

Avoid piling on the debt. Go easy on the debt following any type of financial difficulty. Now more than ever, you’ll want to demonstrate your ability to effectively manage your existing debts. Keep the amount of your available credit that you use low in relation to your overall credit limits.

Make payments on time. Making payments on time can have a big effect on improving your credit score. In fact, the last two years’ worth of payment history is a big factor in determining whether you qualify for another home loan. As your payment history and credit score improves, you’re also likely to qualify for lower interest rates on a variety of consumer loans.

Start saving. This doesn’t help with your credit score. But it will help if you want to buy a home. The bigger down payment you have saved, the more likely you will be able to qualify for another home loan. In fact, depending on the circumstances, you may be able to qualify for another home loan in as little as 2 years after a short sale or foreclosure on FHA and VA loans (3 years on Conventional Fannie Mae and Freddie Mac loans!

Utilization of revolving debt: You can increase your credit score with the utilization of revolving debt (such as credit cards). There is a certain, magic percentage in which you need to keep your balances versus your credit limits…..call me to find out or email me at freddie.marmolejo@supremelending.com to find out 😉

Rebuilding your credit doesn’t happen overnight; but it can happen in a lot less time than you think. Fortunately, with SecurtiyNational Mortgage you have access to FHA loans below most other lenders minimum credit score, as well as VA Loans and backed by the Veteran’s Administration.

Let’s Talk (512) 861-6566  Freddie Marmolejo NMLS #328534 freddie.marmolejo@supremelending.com

Chris Marmolejo NMLS #205023

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