If you do not already keep track of your credit, then one of the first things you will need to do before contacting an agent or mortgage company is to get your credit in order. Lenders will be taking a close look at your financial history, including; income, credit, debts and assets. You'll be asked to disclose to the lender all outstanding debts, including any loan or financial obligations such as credit card balances, alimony and child support payments, car loans, medical bills, etc. Lenders will also want to see how much money you have in savings, after deducting your down payment amount. You'll also be asked for your employment history and will need to show job and income stability and security. You can visit
http://www.annualcreditreport.com/ and request a free credit file disclosure or free credit report once every 12 months.
Here are a few tips to help you to improve your credit score:
- Address any corrections that are needed on your credit report. Most credit reports have at least one error
- Pay down any outstanding debts as much as possible to show lenders that you spend within your limits.
- Ask your credit card companies to issue credit line increases to lower the percentage of the credit limits that you currently have.
- Do not apply for new credit cards.
- Pay all of your bills on time, even if that means just making the minimum payments.
Getting your credit in order can help in many aspects of your life. It is essential to check it prior to getting pre-approved as your credit will affect your mortgage approval. If there are errors on the report it could lower the amount for which you could be approved.
