If you're looking for your next house, it's time to buy. More homes are on the market and prices are falling.
The market is good, but is your credit score good enough get one?
Kevin Hampton at Anchor Home Mortgage in Spartanburg says credit guidelines to get a home loan have tightened, “Our target audience, the people that we are going to advertise to, the people that we are going to try to get a home for, they are going to have to have a lot better credit and also a lot better assets.”
Last year, Hampton could approve 100 % financing on a 600 credit score. Today, you'll have to have a least a 680.
There is hope and ways to improve your credit score so you can move into a brand new home. It just takes time. “At least six months with on-time payments will help a lot,” said Brent Bishop at Compass of Carolina. Bishop is a certified consumer credit counselor.
Here's how he breaks down what determines your credit score:
Payment history: 35%
Amounts owed: 30%
Length of credit history: 15%
New credit: 10%
Types of credit: 10%
Payment history, and how much you owe, determines more than half your score. While Bishop says those are most important, the number one recommendation that could increase your credit score today is to check your credit report for mistakes.
“Things like an account that's still showing a balance or a medical bill that belongs to someone with a similar name, or just things like that pop up maybe challenged on the report where things are moved or adjusted,” Bishop said.
There's only one government recommended website to get a free copy of your credit report: www.annualcreditreport.com.
Hampton says there are government programs that can get you a home loan if your credit score is low. Some of those programs cater to first-time home-buyers.
Anchor also says the multi-billion dollar bail-out package approved by Congress will make it easier to get home loans for consumers with bad credit, but it may take several months.
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