Most consumers believe it they pay their bills on time they will have a significant high enough credit score to get a very low rate home loan.
Credit Usage and Impact On Score
Your credit score is made up of more components than just paying bills on time. How much available credit you have is a factor, how many open accounts also have an impact on your credit score.
Credit accounts that are very old, paid off and new accounts are also factors in your score. Creditors that have old outstanding collections against you need to update with the credit reporting agencies. Many fail to do this over time and sometimes the debt is gone from the report.
Protecting Your Credit
Without knowing a consumer can have negative items reported due to error, misreporting and identity theft. If you believe your sensitive data may have been compromised check your credit report.
Consumers should be aware of the factors which impact their credit score, and also be aware of the factors that do not impact their scores. Understanding your credit score may be the most important tool you have when buying a home or refinancing your current mortgage.
Taking a good look at your credit and finding out how much financing you are pre-approved for is as important as working with a great realtor. Be sure to contact your trusted real estate professional to help you find just the right property for you.