Everyone needs a house, but not everyone has a good, or even average credit score. We all make bad financial decisions that reflect badly on our credit score sometimes, the most important thing is that we are able to find ways to improve our credit rating and get a decent home in a nice community. If you are one of us occasional bad decision-makers who need to know how to fix your credit to buy a house, then this article is for you.
A credit score is a set of numbers that affect practically every area of your life. From your ability to get a job to your eligibility to qualify for a home loan, your credit score determines the quality of your life to a good extent.
A credit score tells lenders whether you are a high-risk borrower or not, and these details will be used to structure not only the amount but also the terms of your loan. If you are worried and stuck googling “how to fix my credit to buy a house” over and over again, reading this article and sticking to the tips it provides will give you all the insight you need in one place.
How long does it take to fix your credit score?
The people fixated on asking the “how long does it take to fix your credit score” question are probably on the same list as those stuck googling “how to fix my credit to buy a house” over and over again. This is because worrying about how long it will take to fix your credit score instead of actually going out there and doing the work required to fix it is of no good.
Nobody can tell you exactly how long it will take to fix your credit score, as that answer will greatly depend on the number of things that need fixing and debts that need paying. Averagely, however, individuals report being happy with the results they get 3 – 6 months into the credit repair process.
How do I fix my credit to buy a house?
“How do I fix my credit to buy a house,” you ask? We have broken down the steps you require to know how to fix your credit to buy a house fast in 2022.
1. Be truthful with yourself about your present situation
The first step to knowing how to fix your credit to buy a house is by taking an honest look at your present situation. What is your credit score now? Are you behind on your loan payments? Do you need to get a new or extra job to improve your credit and living situation? It all begins with making an informed decision that works best for your current financial situation.
2. Consider enlisting the help of a professional
A professional credit repair agency will work hand-in-hand with you and provide you with practical tips, advice, and guidance tailored to improve your credit situation.
3. Check your credit report for errors
Go through your credit report carefully and compare it with your personal financial records to see if there are any errors or discrepancies reported there. If you find any, ensure that you dispute it with the proper credit reporting agencies.
4. Request a review of your credit information
Most commonly performed by mortgage lenders, this point involves a lender reporting new, better, and accurate information to credit bureaus. The person who carries this out must have access to credit reporting data from credit bureaus. This is why it is almost only carried out by mortgage lenders or companies that specialize in rapid rescoring.
5. Set up autopay
Running late on the payments of your debts is one sure way to ruin your credit. This little, often ignored part is extremely important, as your payment history can make up to 35% of your total credit score. In simpler terms, how diligently you keep up with your debt payments will have a LARGE effect on your credit score, and while there may be no way to go back in time and make up for all the payments you may have already missed, you can begin making better decisions today to improve your credit score gradually.
6. Lenders also consider your credit utilization ratio
To calculate your credit utilization ratio, lenders will compare your credit card balances to your overall credit limit in order to determine how good you are at managing your finances. It is advisable to keep the figure below 30%.
7. Decide on a debt repayment strategy
You can either choose a debt avalanche or snowball method. Both work fine depending on your interest rates and financial goals.
8. Don’t take out new loans
This is pretty basic common sense. If you are trying to fix your credit to buy a house, then acquiring more debt is the last thing you should want to do.
9. Get your mortgage loan prequalification and compare rates between lenders
Getting your mortgage prequalification is the final but very vital step in uncovering how to fix your credit to buy a house because it lets you know the kind of house you can afford in the first place.
When you get prequalified, shop around and compare interest rates and loan terms between several lenders before you arrive at a final decision.
We hope you found our blog about how to fix your credit to buy a house helpful. Click here to read more blogs like this if you did.
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