Protect your credit first
Are you ready to buy a home and wondering where to start? Before getting lost on Zillow first, take these five steps to protect your credit and save tens of thousands of dollars when you buy your next home.
5 steps to protect your credit
Shows like House Hunters make us excited about searching for a new home to call our own. Shows like Fixer Upper inspire us to make our new home our own. What these shows don’t show is what to do before getting into the real estate market.
The next best thing for your wallet to having a sizeable down payment when buying a home is obtaining a low mortgage interest rate. The best way to obtain a low interest rate is to have a good credit score.
So, before you save your filter on Realtor.com, take these five steps to protect your credit and save money.
1. Check your credit scores
The last thing you want to do is apply for a mortgage without knowing what your credit score is, otherwise you might be in for a shock.
So, the first thing you’ll want to do to protect your credit is to find out what your credit score is. If your credit score is good, 700 or higher in a range of 501 to 850, great. The next steps will help keep your credit score in the good range. If your credit score is not so good, 699 or lower, these steps will help improve it.
Either way, once you know your credit score, you’ll know where you stand. Once you know where you are, then you can accurately plan to get to where you want to go.
2. Check and clean up your credit report
Credit reports are profiles of our credit histories from the moment we have one. Experian, TransUnion and Equifax are the three agencies that create and maintain credit reports. These agencies share credit reports with lenders, such as mortgage lenders, upon request to determine how risky a borrower is. Loan approvals and interest rates are based on the applicant’s creditworthiness.
Over time our credit reports can become inaccurate. Therefore, check your credit report regularly, even when you’re not in the market to buy a home. Then, review your identification information, such as your name, address and Social Security Number.
Next, check your credit report for discrepancies, such as accounts that don’t belong to you or account balances outside your norm. Look for outdated negative marks on your credit report. Most, not all, negative information should fall off your credit report after seven years.
Finally, if you have incorrect or outdated information on your credit report, dispute them with the appropriate credit rating agency or agencies, Experian, TransUnion and Equifax. In time, your credit score will improve after these corrections.
3. Protect your credit report, credit score and identity
After cleaning up your credit report, protect it, your credit score and identity. Identity theft is becoming more common, as identity thieves are becoming creative and more of our financial and personal information is online.
Following these five steps will go a long way to help protect your credit report, credit score and identity, but as fast as everything happens today, you can’t be too proactive. That’s why you should apply for credit protection and monitoring.
4. Monitor your credit report and credit score
Next, to help protect your credit and get those low mortgage rates, regularly monitor your credit report and credit score. As soon as you notice something’s off, act to investigate and correct it. Because everything is online and fast, every moment counts when you’re trying to protect your credit.
5. Use tools to assess and manage your finances
The key benefit of today’s technology is the amazing tools that are available to assess and manage our money. Too many people don’t pay attention to their money because it scares them, but the right tools can keep you on track with your goals, such as buying a new home and make it easier to do so.
Find the tools that work for you and make them work for you. So, everything can happen in one place for you.
You can’t be too aggressive when applying for a mortgage loan and getting the lowest rate possible. You, also, can’t be too aggressive when you’re trying to protect your credit. With these five tips, you’ll stay on the right track.