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Ways to Improve Your Credit to Buy a Home in Denver


August 16, 2017

Are you considering a purchase of a new home? Whether it is your first home or your next home, there is much to prepare for before you start looking. As you plan to buy a home in Denver, you can speak with your realtor to get pre-approved so you know the steps to take to be able to purchase a home. To help you build those building blocks, there are a few key tips. Learn the basics of your credit score, tips for building your credit while in the process of buying a home, and the ins and outs of interest rates.

Basics of Your Credit Score

Your credit history and credit score are generated and can be reviewed by lenders when requesting credit, such as a loan or credit card. Your score is a three-digit number and is created based off a few factors, such as history of paying bills on time, how much debt you have, how long you have been building credit, how many times your credit has been ran and the different type of credit you have. Your ability to pay bills on time (or lack thereof) and your total debts have the most weight when it comes to influencing your score. It is important to monitor your score and credit to make sure you are headed in the right direction. It is also important to ensure there are no errors in your report or seeing if anyone has stolen your credit. As a consumer, you can check your credit report for free--so be wary if you find a service asking you to pay. Find one that works for you from The Simple Dollar’s best free credit report site of 2017.

Tips for Building Credit

To get started building credit to enable you to buy a home, you will want to find and sign up for a service that allows you to check your credit. Look for discrepancies or anything questionable. Most mortgage lenders will want to see two to three lines of credit in your history. This can include credit cards, student loans, an auto loan, etc. If you do not have any history, you will want to build it. You can talk to your lender about how long to wait before working to get pre-approved. If can be anywhere from six months to a year. Keep balances low, and work to not exceed 30 percent of your credit cards. If/when you have credit, you will want to lay low once you know you would like to buy. Adding on new lines of credit during this time can hurt your chances of getting a loan.

Interest Rates

If you are in the market for a home, interest rates are lower now than they were two months ago. The average rate for a 30 year fixed loan is just about four percent. With interest rates on the decline, it is a great time if you are in the market for a home. Rates vary too for those who are interested in a 15 year fixed mortgage. It is an opportunity to speak with your realtor about to take advantage of low rates.

Are you currently renting and are ready to make a move to buy? Learn more about the benefits of leaving an apartment and purchasing a home from your Denver real estate agent. To get started to see what you need to do to be able to buy a home, the Giving Back Group will help. We can work with you to help you find what you need to make your dream a reality. Get started today by calling us at 303-881-4881.