Hey there, future homeowners and property moguls! Welcome to my channel and please, take a moment to hit like or subscribe to the channel. I’m Joe, your friendly probate real estate agent, and today I’m diving into the intriguing world of credit scores.
Did you know that your credit score is used to determine what you pay on a loan, and in some cases if you are insurable? Credit can have an impact on every aspect of your life and here are some tips on how to be in the BEST shape possible for your home buying journey.
Picture this – your credit score is like the VIP pass to the financial party of life. And guess what? The first tip is on the house! Did you know you’re entitled to a free credit report each year? It’s like getting a backstage pass to your financial rock concert. Go ahead, snag it! AnnualCreditReport.com is your golden ticket to seeing where you stand in the world of credit. Invest the time to get a copy of the report so you have a baseline of where your journey begins.
When you review your credit report your may not know what to look for. Here are some of the factors that may be Impacting Your Score
The credit score symphony has multiple players, and they’re conducting the score orchestra. First up, time or age – the longer, the better. It’s like fine wine; your credit gets better with age. So, although you might want to close an old account you don’t use anymore doing that may actually hurt your score rather than help your score.
Another important piece of the credit score calculation is your payment history! On-time payments are the rockstars here. Be the rockstar of financial responsibility and make at least the minimum payment on time. Ideally, pay more than the minimum due but if money’s tight and that’s all you got then make that minimum payment! REMEMBER! Whenever possible pay off the card in full.
When talking about credit worthiness there is a delicate balance of debt to credit available. It’s like a seesaw – don’t let it tip too much in the direction of money owed. Aim for that sweet spot. I have heard you should use anywhere from 1/3 of your credit limit to 1/2 of your credit limit to hit that sweet spot. Credit is meant to be used but not maxing out your cards is a definite plus to your score.
Did you know that collection accounts can have a HUGE impact on your credit score? Sometimes those accounts are reported erroneously. Other times they are yours and you need to get them paid. Regardless of the circumstance collection accounts should not be ignored. Address the issue with your creditor and whenever possible negotiate to see if you can pay less than the amount reported.
Another important part of your credit report is the information provided. Beware of erroneous information. If your credit report were a novel, make sure it’s a bestseller, not a fiction piece. Check your addresses, name spelling, EVERYTHING! It’s crucial that the information is accurate.
There you have it, folks – a quick guide to credit scores! Remember, with great credit comes great real estate opportunities. PLEASE take a moment to hit the like button or subscribe. I’m Joe, signing off until next time, happy scoring!