In the context of real estate, the Credit Score is a make-or-break factor when it comes to qualifying for financing for a home, or other purchase. Typically, I tell buyers and sellers to be prepared 6 months or more in advance, but when it comes to fixing your credit, a couple of years might be required. Let's talk about credit:
How a Score Breaks Down
There are five main factors that effect a credit score, each contributing a different percentage to your overall score:
Actions That Lower a Credit Score
There are several key actions that will effect your credit score negatively, and here are some of them:
Ways to Improve a Credit Score
As I mentioned, fixing your credit takes time. It is important that you start working on fixing it ahead of time, even years before applying for a mortgage loan. Here are some ways to help fix the score:
The Tool You Should Use
As mentioned above, monitoring your credit once a month is a simple task, especially with free tools such as Credit Karma. I have been using this for years, and it's just a consistent and free way to monitor your credit. It also does an excellent job of breaking down your score for you, so you understand so much more about how to fix your credit.
This seems like a shameless plug, but as always, my goal is to educate. I have no obligation or benefit from mentioning this product, except to help you avoid financial issues because of credit. Hopefully you get as much out of this post as possible!
We (Joe and Chris Balestriere) are Realtors in Fairfield County, Connecticut. Our blog is meant to educate buyers and sellers and equip them with tools to get the most out of their Realtor, whether it is us or someone else. We focus on technology and how it enhances the work we do for our clients--we are not top CT Realtors by accident.