how to get a credit score

Are you waiting out the real estate market, sitting on the sidelines just watching and waiting? Are you waiting for the best possible time, when home prices are as low as they're going to get and interest rates are still low? Don't just wait. Use this time to get ready so that you can move when the time is right. Buying a home is a complicated, time consuming process, full of snags and hurdles, some of which could prevent you from buying. Now is the ideal time to find out what roadblocks you might face and get them out of your way.

By far the most challenging part of buying a home is qualifying for a loan. You can improve your chances of getting a loan when you're ready by doing a few simple things now.

Clean up your credit. Contact the credit reporting agencies and get a copy of your credit report. There are many services that will do this for you - for a fee. But you can get copies of your credit report for free by contact the credit reporting agencies directly. If you're planning to buy a home with your spouse or anyone else, you'll need credit reports for both people.

Look for errors. If there is any incorrect information on a report, write a letter to the credit reporting agency explaining that the information is incorrect. There is an established protocol where they contact the creditor for a response. Get started now, because this process takes time. Don't just do it with one credit reporting agency. Go through this with each of the three. When you apply for a loan, the lender will request a credit report from at least one of three credit reporting agencies, but it's their choice which one(s).

If you are behind on any payments, now is the time to fix that. Catch up any delinquent loans and make sure that you pay all of your bills on time. If there are some damaging things on your credit report, they will count for less as they get older and your more recent history is positive. Going forward, make sure that your payment history is spotless.

Don't open new accounts and try to decrease the balances of old accounts. Having too many loans can bring down your credit score, even if you always make your payments on time. If you're thinking of buying a car, wait until after you've bought your house. Car loans are much easier to get than home loans.

You'll need a solid employment history to qualify for a home loan. Lenders want to see that you are steadily employed in the same field for at least two years. You can switch employers without any trouble, as long as you're working in the same field. But if you plan to make a major career change, you might want to wait. The same goes for the way you earn money. If you are an employee earning a steady paycheck, but you want to go into business for yourself, you should think about holding off. Lenders want to see that you can keep up a steady income, and that means a two year history of doing so.

Start saving up to pay for closing costs and a down payment. You'll probably need to talk to a mortgage broker or do some research online to figure out how much money you need to save. You'll need to know how big a loan you can afford so that you'll know what price range you're looking at. Also, different types of loans require different down payment amounts. FHA loans, for example, allow you to put as little as 3.5% of the purchase price down. You may be able to negotiate for the seller to pay some or all of your closing costs, especially if you buy a new home from the builder. Figure about 3% of the purchase price for closing costs.

As you can see, improving your credit and saving up money take time. Start now so that you'll be in the best possible position when you decide that it's time to take the plunge.

how to get a credit score

howto get a credit score

Many new home builders are offering to pay closing costs. Check out these Chula Vista new homes, where you can get $10,000 towards closing costs or upgrades. Find more information on improving your credit score.

how to get a credit score: how to get credit reports

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