Before buying a house – Repair your credit
Have you ever thought of repairing your credit before you apply for a mortgage loan? Lot of buyers do not think very seriously about credit repair, as they feel that they have enough to take care of a chunk of the amount required for purchase by virtue of their old sale. This is not a very bright idea. Bad credit reports or credit scores can very badly affect the interest rates on offer, however small the amount is. Hence, repairing credit is as important as the financing itself. Bad credit reports or scores tend to prove very expensive for individuals, as banks cite these reasons to charge you non-prime interest rates that are almost double the normal rates.
Credit repair can be done in two ways. You can either repair the report or increase your scores. All approvals related to your mortgage loan, be that the interest rate on offer or the down payment that is required, is normally related to your reports or scores.
Repairing the report is normally a very boring administrative exercise. You have to get the reports from all the credit reporting companies and look at them to spot any mistakes. If mistakes are found, either due to faulty reporting or due to errors in typing or dictations, bring these to the notice of concerned and get the reports corrected as soon as possible. Submit these corrected reports to the banks to avail the loans at normal rates.
The second way of doing this is by having a total make over of your habits and life style. Look at your past and see if there have been any major mistakes in the past. Things like bankruptcy or default in payments can bring down your scores really badly. Have a new credit established and make sure that you start building good financial habits. Pay your bills on time; do not default on loan payments and start saving so as to have a back up for any emergencies.
A good effective and time saving method of repairing your credit is to entrust this job to an attorney who can take care of these issues. They can make sure that all loopholes are closed so that you do not experience any future issues related to a bad credit report. There are lots of companies who promise to boost your credit score in a couple of weeks. Do not trust them and use the services of only authorized professionals.
Dealing with credit issues, understanding impact of different credit scores and having an annual check up of your credit file are a few steps that can help keep your credit situation healthy.
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