After the real estate crash of 2007 – 2008 banks and lenders are more cautious than ever with whom they will loan money to for a real estate purchase.
If you find yourself dealing with some credit issues, you might want to really focus on getting them repaired before you start your new home search.
If you are wondering what a decent to good credit score is, check out a blog post on credit.com
Not only will your interest rate for your new home be higher if you have a lower credit score, but other things that come along with it will be affected as well.
Did you know that your home owners insurance could cost you twice as much if you have a bad credit score?
People with fair credit could pay as much as 32% more according to credit.com
"You’re probably already aware that credit scores are a major factor when you’re buying a home, because your credit score affects the interest rate you get on your mortgage. Considering how big home loans are, a few credit score points could translate into a slightly higher rate, which ultimately can add up to thousands of dollars in interest over the life of the loan.
Of course, there are many more expenses that come with buying a house than taking out a mortgage. Pretty much everyone takes out homeowners insurance, which can — on average — tack on nearly $100 or so to your monthly homeownership expenses. On top of that, you could be paying higher insurance premiums just because you don’t have a good credit score” Read more here…
Also that new furniture you need for your new home will probably come with a higher interest rate, & you’ll have to make larger deposits for utilities.
In short depending on your credit score, you could be paying a heck of a lot more to buy that new home now. But alas, hope is not all lost.
How to Fix Your Credit Score Fast (6 Months from Poor to 700)
If you find yourself dealing with some credit issues, you might want to really focus on getting them repaired before you start your new home search.
If you are wondering what a decent to good credit score is, check out a blog post on credit.com
Not only will your interest rate for your new home be higher if you have a lower credit score, but other things that come along with it will be affected as well.
Did you know that your home owners insurance could cost you twice as much if you have a bad credit score?
People with fair credit could pay as much as 32% more according to credit.com
"You’re probably already aware that credit scores are a major factor when you’re buying a home, because your credit score affects the interest rate you get on your mortgage. Considering how big home loans are, a few credit score points could translate into a slightly higher rate, which ultimately can add up to thousands of dollars in interest over the life of the loan.
Of course, there are many more expenses that come with buying a house than taking out a mortgage. Pretty much everyone takes out homeowners insurance, which can — on average — tack on nearly $100 or so to your monthly homeownership expenses. On top of that, you could be paying higher insurance premiums just because you don’t have a good credit score” Read more here…
Also that new furniture you need for your new home will probably come with a higher interest rate, & you’ll have to make larger deposits for utilities.
In short depending on your credit score, you could be paying a heck of a lot more to buy that new home now. But alas, hope is not all lost.
How to Fix Your Credit Score Fast (6 Months from Poor to 700)
There are a few steps you can take to start fixing your credit right now.
Go out and get a secured credit card.
These cards have you put up a security deposit usually in the $300 range.
You will pay a higher rate, but if you completely pay the balance off every month you won’t see much extra costs. Maybe use the card for your monthly groceries? And pay it off at the end of the month in full.
Make sure you pay all of your utility bills as fast as they come in. FICO recently announced that they will be incorporating new data into the algorithms that generate credit scores and how fast you pay your utility bills will be in this update. Make sure you pay them in full as well.
Lastly, pick a bill you are struggling with and try to get it paid down as fast as you can.
Taking a second part time job is a great way to earn extra dough to get that credit score fixed fast!