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Credit Cleanup Before Home Ownership

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Are you thinking about applying for a home loan? Have you contacted a reputable company like Sun West Mortgage? While home ownership is the American dream, be sure that your credit score is up to snuff before applying. You don’t want to work yourself into an excited frenzy only to realize that your credit score isn’t high enough to qualify.

Sign up for a Credit Monitoring Service

The three main credit bureaus in the United States are Equifax, Experian, and TransUnion. Checking your credit score with all three before walking into a lender’s office is the first step you should take before applying for a home loan. A good score is between 670 and 749, while a great score is anywhere above 750.

  • Research, research, research credit monitoring companies. Check out Better Business Bureau reviews and be sure that the one you choose is a legitimate company. The last thing you want is to willingly give out your information to a bad guy.
  • Credit Karma is a free service that offers credit monitoring and other perks. It’s a great place to start, but the bad part is that you can’t access your actual credit report; you are given a Vantage score instead.
  • For a monthly price, ScoreSense is a very comprehensive monitoring service that doesn’t just give you all three credit scores and access to your reports. It also offers advice on how to boost your credit score.

Clean Up

If your score is lower than you had hoped, that’s okay! It just means that you have a little more work to do than you expected. Everybody needs to start somewhere.

  • Get your debts under control. Pay off any outstanding debts or loans or set up a payment plan. Contact your debtors if you have questions.
  • Write goodwill letters to creditors that you are in good standing with. For example, if you were late on an automobile payment once in a year, but you have a valid reason for it (e.g.: you lost your job), write a letter explaining the circumstances, They might help you out with these one-off debts.
  • Responsibly use your credit cards. Try to stay under 25% usage of your total balance and pay all the bills on time. A steady flow of payments made on time establishes good faith between you and your credit card company.

Congratulations on your endeavor of buying a home. Getting your credit score in order is not fun and it can be difficult, but keep doing the right thing. You will be grateful for the time you spent getting things in order when you are toasting over champagne in your new house.

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