Wilmington and Burgaw Area Real Estate News

Even if you owned your own house before, the markets, economy, and industry trends changed over the past two years. You might find it more difficult to get approved for a loan these days. Don't lose heart. There are some steps you can take now to improve your credit score and elevate your chances for a home-loan approval and even get a more competitive interest rate.

A good credit history can help you negotiate a better interest rate and sometimes even lower your down payment. If you lack a credit history, banks and lenders are wary about extending you a loan. Why, you ask? It's difficult to tell whether you will make a responsible mortgage payer or a risk.

How Is A Credit Score Calculated?

To calculate a score, Fair Isaac uses 22 pieces of data collected from the three major credit bureaus: Equifax, Experian, and TransUnion. The lowest possible score is 300, while the highest is 850. Fair Isaac created FICO, the most widely used credit-score formula.

The final number is a composite of individual ratings in five categories:

* Payment history (35% of the rating)

* Length of credit history (15%)

* New credit (10%)

* Types of credit used (10%)

* Debt (30%)

Income is not a factor.

You can work your way to building your creditworthiness through a stable credit score. Here's how you could begin, what you should know, along with a few do's and don'ts to add to the mix.

Discover Your Credit Score

The first step to fixing a credit score is determining what your score is. People often presume that they have a bad score, when in fact, it might be fine. For example, if you delayed outstanding payments by a couple of days, it does not always affect your score. What ruins a credit score is when you've deferred paying more than 30 days. Payment on time always adds more stability to your score. You can obtain a copy of your most recent credit report and then strategize your financial plan accordingly. The Fair Credit Reporting Act guarantees you access to your credit report for free from each of the three nationwide credit reporting companies (Experian, Equifax, and TransUnion) every 12 months. To get your free copy, visit the official website, www.annualcreditreport.com, call 1-877-322-8228, or fill out the report request form found online and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

Or Visit:

www.annualcreditreport.com/
www.freecreditreport.com/
www.TransUnion.com/Credit_Report

Maintain Good Banking Habits!

Creating and maintaining a sound checking and savings account could take you a long way in building credit worthiness. Your bank account is the first place that lenders look to understand your financial stability.

What Affects Your Credit Score?

It takes much longer to build on your credit score than to crash it in the first place. Keep three things in mind:

a) Always pay your bills on time. If you find it difficult to remember the due dates, set reminders and automatic payments in place to ensure you pay on time.

b) Don't max out your credit limit every month. Try and maintain your credit usage to about 10% - 30% of the upper limit. This doesn't just help you maintain a good score but also dodges the debt trap.

c) Pay your credit card in full. This is self explanatory - don't let the credit spill over month after month. Credit card interest rates are high and debt accrues quickly.

If you need any help improving your credit score or obtaining a mortage, please give me a call. I would be happy to get you going in the right direction.

Sincerely,

Tammy Barnes -Realtor - Burgaw, NC Real Estate - Wilmington, NC Area

Search for homes and land in the Wilmington, NC, metro area, including Leland, Hampstead, Burgaw, Ogden, Castle Hayne, Carolina Beach, Kure Beach, and Wrightsville Beach. You will also find information on the buying and selling real estate process, including preparing your home for sale and qualifying for home loans.