When it comes to buying a home in Austin, perhaps the factor that plays the biggest role in the entire process is credit. This is also the one thing that can affect not only the overall interest rate that you will end up receiving on your loan but also the actual long-term costs in terms of borrowing the money itself as well. In the event that you find that you have low or no credit, this is something that can ultimately prevent you from being able to successfully purchase a home, as well as potentially make your dream home even more expensive.
Here are four of the easiest ways in which you can quickly build up your credit in order to enable you to purchase a home.
*First and foremost, take the time to view your credit report and report any and all errors that you come across. There is always the chance that your low credit score is due to these types of errors, such as late payments that are inaccurate, account balances that are incorrect, and accounts that are fraudulent. Typically, you will want to check your credit report every few months and scan it for possible errors. In the event that you spot any, make sure that you report them to the proper credit bureau immediately, as correcting these errors could end up greatly boosting your credit score.
*Another easy way to help build up your credit score to enable you to purchase a home is to make sure that you pay down all of your balances. Generally, all lenders prefer to see a credit utilization rate of approximately 30% or lower, which means that, for instance, if you have a credit line of $10,000, you should consider using less than $3,000. In the long run, the lower you will be able to keep your credit balances, the better chances you will have of being able to pay them down.
*One other useful way of building up your credit score to help you with purchasing a home would be to get yourself added as an authorized user on another individual’s credit card, such as your spouse or a family member. This individual should not only have great credit, but they should also have a history of making all of their payments on time as well. If so, then you can consider requesting that they add you as an authorized user on their own account, which would provide you with the ability to use whichever card that they have added you to. As a result, you will be able to obtain a decent credit boost.
*Another great way to build up your credit score so that you will be able to purchase a home is to take the opportunity to set your bills on autopay. This is something that you should always do whenever it is possible in order to ensure that your overall payment history is stellar. On the other hand, if this happens to not be an option, always set up a reminder for yourself a few days prior to each payment due, as late payments can end up hurting your credit score in a big way.
If you are in the market for buying or selling a home, reach out to the Barton Harris group at Weichert Realtors.