Even during the global pandemic, people still need to buy and sell houses to live in. The real estate markets in America have not shut down, and even as you read this there are mortgages entering the closing stages. Are you looking for a new home to live in?
If you are, it’s likely you’ve asked yourself whether your credit is ready for a major credit application; do you know what to do if your credit report needs correcting?
One of the most common bits of advice in this area is that all borrowers should start preparing by getting very familiar with the contents of your credit report. But there is another step to take at the same time you’re doing that.
Set Your Bills To Autopay
When you review your credit report, why not sit down with all your bills, set up auto pay for as many of them as you can, and automate your monthly financial obligations as much as possible?
Doing this addresses one of the major problems consumers face when trying to maintain good credit. Can you guess what it is?
On-Time Payments Are Key
One of the important factors that goes into your lender’s decision on whether your home loan is approved or denied? Your record of on-time payments in the last year or better.
Those with late or missed payments at loan application time seriously risk the ability to get an FHA loan approved.
There is also a lot of advice regarding credit monitoring; subscribing to a credit monitoring service can help you avoid running into problems due to undetected identity theft.
Using Fraud Alerts
Did you know that some credit monitoring may include automated fraud alerts to detect activity on your credit report that may not be authorized? Using a fraud alert can be a big help if you are worried about identity theft issues complicating your mortgage.
Such alerts help you get the process to contest the activity started as early as possible, and you definitely want to begin that process early.
On-time payments, stopping identity theft in its tracks, and another tactic–reducing your credit card balances well below 50%–are all important factors in fixing or improving credit ahead of a major loan application.
It’s also important for first-time borrowers to know that if you start preparing for your loan and you find problems in your credit report, you will need plenty of time to correct them.
Open disputes or problems related to your credit report should be resolved BEFORE you apply for a loan. Lender standards will vary but the loan officer may have a much harder time justifying the approval of your mortgage loan–the extra time you take to resolve any disputes of your credit report will be well worth the effort.