If you are planning to buy a house, you are making what might be the best financial decision of your life. Home ownership has huge benefits, both personal and financial. On the one hand, you’ll enjoy personal stability, less money spent each month to pay for your house (when compared to renting), and personal privacy as your home’s sole owner (if you don’t count the bank, that is).
Home ownership also has huge financial benefits. You’ll be able to write off your mortgage loan interest. You’ll spend less of your income each month on housing than you would as a renter. You’ll build equity, meaning that every time you make a mortgage payment, that money will essentially be saved in the (kind of) savings account we know as equity.
There are even more perks to home ownership, but the ones already mentioned may be enough to convince you that this is the best move for you. However, unless you have good or great personal credit, you may not be able to get a mortgage loan, or you may pay more for that loan than you may wish. Credit repair companies found here: http://aaacreditguide.com/credit-repair-companies/. But rather than just relying on the pros, let’s actually spend some time learning about how the credit repair process is performed and what it accomplishes.
What Makes Good and Bad Credit?
Your credit score is an encapsulation of your credit history. It’s a simple three digit number that gives the gist of your overall history. When you want to borrow money, through a credit card or in the form of cash from a regular lender, this lender will look at your credit score and decide 1) whether or not to give you the money, and 2) how much to charge you for it.
If you have a credit history that tells the tale of many forgotten payments, over reliance on borrowed money, and other irresponsible decisions, then you will have a poor credit score. If you have always paid your bills on time and have not used more credit and debt than you can handle with your income, then you will have a good credit score. This latter option will be a sign to lenders that you can handle even more credit, and they’ll give it to you without charging an arm and a leg.
How to Improve Credit
If you have committed various credit sins in the past, it will be reflected in your credit score. But you can purge the record. You can pay off the debts in your credit history, and then dispute the charges. If the debt is paid, the item will have to be removed because it is not longer a correct representation of your financial standing.
From there, you can start to see the benefits of better credit. You’ll have many more borrowing options, and you’ll find that it costs less to borrow this money. You may also see improved career prospects, as your credit score tells a good tale about your personal qualifications.
Finally, if you plan to buy a house, your good credit score will qualify you for more mortgage options and will make each of these more affordable. With a home loan, it’s very important to get the cheapest possible option, because this will save you tens of thousands of dollars over the lifetime of your loan, if not more.