Your credit score is crucial when seeking financing for a new home. You want it to be as high as possible to obtain the best financing deals available to you and to receive a mortgage with a more favorable interest rate. Raising your credit score improves your purchasing power and can save you a lot of money when you’re looking for homes in Stateline, Nevada.
Good Financial Practices
The simplest and most straightforward way to achieve and maintain a high credit score is to take care of all your financial obligations by their corresponding deadlines. A good credit history largely depends on whether or not your bills are being paid on time. Your payment history with regard to utility bills, car payments, property lease payments, and credit cards most commonly has a positive or negative effect on credit scores. Pay at least the minimum required amount each month to avoid an adverse impact on your score and to stay in good standing with creditors.
Debt-to-Income Ratio Matters
The amount of debt you have is just as important as your debt repayment history. As a veteran, you may have had college costs covered by the government, but many kinds of debt exist besides student loans. Consider eliminating as much debt as you can before starting your home search, so you can get better mortgage terms at better rates.
Schedule Payments and Consider Autopay
If you’re on a fixed income, as many veterans are, it can be a good strategic choice to set up automatic drafts for recurring payments. This way you can’t forget to pay important bills, and you can avoid derogatory marks on your credit report. To avoid automatically paying high fees or unexpected/inaccurate charges, only use this option for bills that don’t fluctuate too much and that you’re sure to utilize each month.
Dispute Errors on Your Credit Report
Often, people have negative marks and even incorrect accounts listed on their credit reports. You can contact all three major bureaus (Equifax, Experian, and Transunion) to have them remove inaccurate information. This is an important step to take because fraud that you’re unaware of may be affecting your credit history, finances, and credit score. Errors can make it difficult or even impossible to obtain financing and can complicate the home-buying process significantly.
See If You’re Eligible for a VA Loan
As a veteran, you likely qualify for a VA loan. This type of loan can help you significantly with your first home purchase by eliminating all or most of the down payment and helping you receive lower interest rates. A mortgage broker can help you assess your qualifications and show you how large of a home loan you can qualify for. Do your research to find out more about VA loan requirements, rates, and more.
Keep Your Score Up
Keep your debts low and pay bills consistently and on time to reach and maintain a high credit score. Assess the accuracy of your credit report, and consider a VA loan if eligible. Your credit score depends on a variety of factors, but you can influence it for the better with smart decision-making.
Find more useful information about buying a home as a veteran at Mortgages for America.
