Great credit allows you to participate in lending programs that are otherwise unavailable. Construction loans, for example may require a 700 credit score. Investment real estate loans require up to a 740 credit score by some lenders. Without at least a 580 you are not buying real estate any time soon. These are just a few of the myriads of guidelines today that govern who can and who cannot get loans based on credit scores.
Without a score over 660 for a conventional loan many lenders charge a premium of up to 1% of your loan amount. On the average home that’s about $2,000! If you are at 659 and your neighbor is at 660, he’s saving $2,000 and you are not! That’s not chump change my friends, but it should be a wake up call.
Start to prepare NOW for any future purchases by improving your credit scores.
- Get old stuff taken off.
- Re-establish your credit if you have not done so after a bankruptcy or other incident.
- Get high balance cards paid down or spread them out over a few cards so your balances are not close to your limits.
- Get a good mix of credit so if you only have credit cards, get an installment loan or if only student loans, get a credit card or two.
- For goodness sake – pay your bills on time!!
Follow these simple steps and you will in great shape when it’s time to buy. By the way, the time to buy is NOW! See Blog Post “The Cost of Waiting”.
