Start Boosting Your Credit Rating – ASAP!
Before you start looking for a new home, you have to remember that you’ll probably need to take out a loan. If you’re for any reason unconfident about how a credit report will look, you may want to hold off on your decision for a while.
It’s important that you get a loan pre-approved before you start looking for a new home to buy. While it isn’t essential, it’s highly recommended as it saves both you and the seller time. With this in mind, here are some of the ways you can ensure your credit report is as strong as it can be.
Get a pre-loan credit report
Here is something you should remember. The loan approval process is going to cost you. There’s a chance that pretty much every step of the process will come with some kind of fee. This means that if your credit report isn’t satisfactory, then you may still have to pay for fees outside of that credit report.
This is why you should get a low-cost credit report before you begin the loan process. It’s important to remember that credit reports don’t have universal criteria. It’s entirely possible that a failed report with one creditor may not fail at another. But if you do get a bad report from an independent checker, you should take steps to make corrections.
Sort out any debts you currently have
Already being in debt doesn’t necessarily mean you’ll be rejected for a loan. It may mean the loan fees will be higher, though. In any case, it’s really best not to be in any debt when you’re applying for a homeowner’s loan.
If you are in debt, you need to be able to display your ability to pay back consistently. If you can show that you’re got your debts under control, it may be completely fine. If your debts are overwhelming you, you should look into easing solutions. There are businesses such as Nationwide Debt Direct that can offer you assistance. If you’ve got several debts, consider debt consolidation. This turns several debts into one debt, which will make your credit report look a lot more attractive.
You need a credit history
Here’s one that many people forget! Perhaps you’re confident that you won’t get a bad credit score simply because you don’t have a credit history. Keep this in mind. Your credit report is an attempt to predict your future behaviour. A bad credit report shows that your previous financial behaviour leads a creditor to believe you are untrustworthy. If you don’t have a credit history, then the creditor has no data with which to make a prediction.
Having no credit history can give you a bad credit score. There are several things you can do to get the ball rolling. The first thing is to register to vote if you haven’t already. If you’re not on the electoral roll, you will most likely be turned down for any loan. If you have a bank account that gives you an overdraft, then you can dip into that overdraft and pay it back quickly to build up a good history. You can also look into getting a credit card, but you must be sure to use it responsibly!