If you’re thinking about making the switch from renting to buying but you’re not sure if your credit score can handle it, there’s good news: it could be easier than you think to build up your credit.
Before you do anything, follow the FTC’s advice and get a free copy of your credit report. That way, you’ll know exactly where you stand.
What Do Lenders Want?
Lenders want to see that you have:
- A solid payment history with few or no delinquent accounts
- A satisfactory debt-to-income ratio
- A reasonable age of credit history
If you have those things, then lenders will look at:
- Your capacity to repay the mortgage by having a stable source of income is extremely important.
- Lenders want to see that you have enough money to make mortgage payments, so part of the approval process includes determining how much cash you have the bank.
- Market conditions. Lenders want to see what kinds of outside influences can affect your property’s value and your ability to pay off the loan.
- If you don’t make your house payments, the lender will take your house – so that means they want to know how much the property is worth in case you can’t afford the mortgage.
Rebuilding Your Credit History
There is no easy way to build your credit overnight. That means if you intend to buy a house in the future, start brushing up your credit report now.
According to Experian, you can improve your credit score by:
- Making payments on time
- Keeping balance is low on credit cards
- Only open new credit cards when you need them
- Pay off your debt instead of transferring balances
- Don’t close unused, old credit cards
Are You Thinking of Buying a Home in Tampa or the Surrounding Communities?
Call us at 727-584-8480 of 813-961-6000. If it’s easier, contact us online. We’ll begin searching for a home that meets your needs right away – and before you know it, you’d be living in your own space.