Repairing Credit Prior to Purchasing

Credit repair is no small feat, but remember – it’s possible, although it could take some time. It’s also good to remember that credit scores reflect credit-worthiness; you are being evaluated numerically based on your history of repaying the credit that has been extended to you.

If you are in the market to purchase a home and would like to fix up your credit score beforehand, here are a few things you can do:

• Pay down your credit cards. Carrying a balance on your credit cards that is close to the limit can negatively affect your credit score. You don’t have to pay off card balances completely to make a difference in your scores;  try to pay the balance down to 30% or less of the limit. This demonstrates that you can use credit responsibly, thus raising your score.
• Continue to make all payments in full, on time. Falling behind on paymentsbefore applying for a new line of a credit (a mortgage is one of the most important lines of credit there is) is not a good way to tell lenders you will be a responsible homeowner. A lender must evaluate the risk of extending credit to you before they do so. They would rather extend credit to people who have a history of making full, on-time payments.
• Think ahead when searching for a lender. Although this tip might not seem beneficial at first glance because it does not necessarily raise your score, it will help you avoid being penalized while searching for a lender. Often, people looking to buy a home will allow multiple lenders to pull their credit for a pre- approval. They haven’t decided which lender they will use, but inquiries from each lender are negatively impacting their scores. The more inquiries made in a short period, the worse the effect on your scores. While you are shopping for a lender, consider specifying that you are not ready to begin the pre-approval process until you’ve decided which lender you will use.

Madison Jones | Mortgage Consultant

Parlay Mortgage & Property, Inc. | 16612 W. 159th Street, Suite 201 | Lockport, IL 60441

Corporate NMLS # 218753 |IL License # MB.6760430 | IN License # 218753

Office: 815-838- 6613 | Fax: 815-838- 6614 | Cell: 815-630- 9730 |

E-mail Madison.Jones@parlaymortgage.com Web: www.parlaymortgage.com

This blog post has been brought to you by Parlay Mortgage & Property, Inc. Parlay Mortgage is a local mortgage lender in Lockport, Illinois. We are licensed in Illinois and Indiana, offering loans for both purchases and refinances. Any questions or concerns regarding rebuilding your financial and domestic affairs after divorce can be directed to our office.