ESTABLISH YOUR CREDIT...
Right from the start
A good credit rating is a valuable asset for home buyers. When a lender receives a application, the first thing to establish is whether the borrower would be a good risk for a loan. On behalf of the lender, independent sources lists the borrower's assets and debts, including credit cards.
The three major credit bureaus -- Equifax, Experian, and Trans Union -- disclose information that tells if the applicant would be a good borrower. Credit reporters look for details that verify where the applicant lives, and discloses defaults or late payments on bills that have been reported to the credit company. Any bankruptcies or arrests also show up on the credit report. Planning for a home starts with saving for a down payment and planning to have a sound credit record. To aim for financial health:
- Keep monthly payments down by cutting up all but two or three credit cards
- Buy as little as possible on credit to avoid monthly installments and interest payments
- Don't buy what you can't afford
- Pay bills and installments before the due date
- Always know how much you owe
- Call the company to make special arrangements for a reduced or late payment
- Seek professional credit counseling before debt piles up to the point where it can't be met
Problems can sometimes be cleared from a credit record, but prevention is the best policy for aspiring home buyers.
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