Whether you are thinking about buying a home soon, or further down the road, it’s never too soon to prepare.
In terms of financial preparation, there are a number of things you can do to get your ducks in a row. As you think through concrete steps you need to take, there are also some things to keep track of, for example your credit score. Whether in the real estate market or not, you should always keep an eye on your credit score.
Why you should check your credit score
When it comes time to make big financial moves (applying for a loan, making any large purchase–including real estate, you want to position yourself to have the best chance of success and get the best deal you can. Having a pulse on your credit score will give you an idea of what you can do to improve your chances. It will also alert you to any problematic issues with your credit, whether it be finding out that you are overextended or discovering suspicious activity that needs to be reported
How to check your credit score
You’ll find a plethora of paid methods to check on or track your credit score. Here are a few ways to check your credit score for free
- AnnualCreditRport.com – You’re entitled to a free copy of your credit reports every 12 months from each of the three nationwide credit bureaus by visiting www.annualcreditreport.com
- Existing Credit Card – many credit card companies offer the ability to check your credit score directly on your account dashboard
What Types of things affect your credit score?
When you know what types of actions affect your credit score, you can work to improve your financial standing. The three major credit reporting agencies publish information about what activities impact your credit score. See below for some of the highlights; click through for more detailed explanations:
Equifax – What Affects Credit Scores?
- Credit Accounts – Revolving, Installment, Mortgage
- Credit Inquiries
- Public Records & Collections
- Used vs. Available Credit
- Types of Credit
- New Credit
- Payment History
- Length of Credit History
5 Good Habits for Healthy Credit - Pay your bills on time
- Use a low percentage of your available credit
- Only apply for credit when you need it
- Give it time
- No negative public records (bankruptcies, collections)
Experian – What Affects Your Credit Scores?
- Payment History
- Amounts Owed
- Credit History Length
- Credit Mix
- New credit (specifically, hard inquiries)
How to Improve Your Credit Score - pay bills on time
- pay down debt
- make outstanding payments
- dispute inaccurate information on your report
- limit new credit requests
How to establish credit - Get a secured credit card
- Become an authorized user on someone’s credit account
TransUnion – Surprising Things that May Impact Your Score
- Back taxes
- Unsettled Accounts
- Hard Inquiries
- Closed or Inactive Credit
Ready to get started on a mortgage application? We can put you in touch with a lender.
Ready to look at houses? Contact us to connect with a trusted advisor
