My Life As A Number CREDIT

Credit is an important part of buying a home. Lenders will scrutinize your credit history to determine if you are qualified to buy a home and what interest rates and fees to charge. The difference between having just okay credit and good credit can cost you tens of thousands of dollars over the life of a loan.

You can establish good credit by:
Having a steady source of income, which for most people is working on a regular basis for 2-3 years
Having a good record of paying your bills on time
Keeping outstanding long term debts, like a car loan, low
Putting money in a savings account.

If you have a lot of credit cards, they are maxed out, and you are barely able to make the minimum payments, you are headed for financial disaster. That cool tee shirt or water bottle the credit card company tempted you with may end up costing you hundreds or thousands of dollars in the future!

A lot of people learn this the hard way and spend years paying off thousands of dollars in credit card debt while suffering the consequences of bad credit. And bad credit can prevent you from getting a loan for a home or even a car!

So how do lenders check your credit history The answer is by running a credit report. A credit report gives others a  snap shot of your credit worthiness. It will show what types of credit you currently have and/or what you have had in the past.

It also shows if you have paid your bills on time, filed for bankruptcy, or if you have ever been evicted from a rental property.

Because of sales commissions and one time up-front fees that are part of most real estate sales, home buyers should plan on staying in a home for several years to try to recoup these costs. If your lifestyle is mobile or you expect that you may need to move because of a job change, renting may be a better choice for you.

Home Buyer Hint
Having a good handle on what your credit situation is before heading to a lender to ask for a loan can save you countless hours and costs. For about $10, you can order your credit report by mail, phone or over the web from one of the three major national credit bureaus.

For more information, check:

In addition to providing you with a copy of your credit report, these bureaus can help  clean up any incorrect information in your report, and explain in more detail how to build up good credit and how to avoid bad credit.

If your credit is in bad shape, you may want to wait to buy a home and spend the time needed to repair your credit instead. Check out the resources section of this guide or surf the net to find a certified credit counselor who can help you get back on track.

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