Looking for a lender? Great! How’s your credit?

    In today’s housing market, acquiring a lender is almost a necessity.  You’ll need someone to help with the finances.  However, there is something you’ll need to have before they can work with you – Good Credit!  They need proof that you are a good risk to lend financial assistance.

    How do you get good credit?  There are several tips that Lending Tree offers:

    Make sure your credit is good so your money  can support your housing needs
    Make sure your credit is good so your money can support your housing needs
    • Have a good history.  Almost everyone has debt these days.  However, making on-time payments – even if you pay the minimum monthly payment – is a good thing.  It will show that you are willing to do what it takes to pay off your debt.  Late payments hurt your credit as well as bankruptcies, collections and other financial issues.  Make sure your pay on time.
    • Your debt-to-income ratio needs to be positive.  In other words, make sure your debt doesn’t outweigh your income.  A good rule of thumb is to make your debt less than 40 percent of your income.
    • Your credit history is important.  Lenders like to see that you have been paying off debts such as loans or credit cards.  If you have been consistently paying off debts for a long period of time, it will look better because of the experience, and it will show that you’ve been willing to pay attention to it rather than just letting it build.
    • Lenders will also look at the number of new accounts you have opened.  While having a couple of credit cards is fine.  You don’t want to have more than that.  Credit card applications show up on your credit report, and you want to make sure they see as few as possible, which is evidence that you are taking care of your debts and not robbing Peter to pay Paul.
    • Creditors also look at the type of credit you have.  Mortgages are looked at more favorably than credit card debt.  They understand that you need loans to help pay for a house.  However, not everyone needs credit cards to stay within a budget.  Look at your finances and make sure you’re choosing smart types of debt.

    There are specific debt types that creditors look upon more favorably:

    There are many things you can do help you secure a loan for the house of your dreams
    There are many things you can do to help you secure a loan for the house of your dreams
    • Mortgages can be a good thing if you’ve kept up with payments.  Your home can also appreciate in value, which can be beneficial if you decide to sell it.
    • Car loans are helpful, but be wary of the rate.  Make sure you look for the best rate for which you qualify.  But, remember that the value will depreciate over time.
    • Bank loans can be used for education in pursuit of your dream career and big salary – as long as you pay them off regularly.
    • Be careful with credit cards.  Don’t apply for too many in a short period of time.  Remember, each application shows up on your credit report.  Be sure to also keep your balances well below 80 percent.
    • Debt consolidation loans are good for more than one reason.  Most people – especially college students who have just graduated – often have a lot of debt to pay off.  Consolidating these loans will show that you are trying to help your situation rather than let it grow.  Additionally, you may qualify for a lower interest rate than your original loan gave you.  It pays to do your homework.

    The Powell Group is always here to answer any of your housing and loan questions.  Our team members can assist with improving your scores so you can buy the home of your dreams.

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