Buying a house is a serious matter. This is why it is essential to make preparation. One of the first things you need to prepare is your credit score. Your credit is very important because it affects the major factors affecting your home purchase. If your credit is good, it will be easier for you to get a loan approval. However, this is not the case if your credit is bad. Once your credit is bad, it will be difficult to find a lender that will approve your loan. If your application ever gets approve, your interest rate will surely be higher.
Check your credit ahead of time. You are entitled to have a free copy of your credit report from the different credit bureaus at least once a year. Make use of this. You should look at your report months before you apply for a loan so that you can make the necessary corrections and the improvement will reflect by the time you apply for the loan.
There is a great chance that you will find errors on the reported transactions. These are because of errors made by the different parties submitting and recording such information. The credit bureaus will have no way of knowing it unless someone tells them. This is why you have to be vigilant and check the various errors in the report.
What will you do when you find errors? Well, take note of them. Mark them so that it will be easier for you to find. Photocopy the report. On the photocopied report, highlight the items you marked so that other users will easily find them, write a letter of dispute and enumerate the erroneous transactions. Attach the photocopied report and documents supporting your claim. Make sure that your letter is clear and orderly so that it will be easier to follow. This will help speed up the correction process.
Keep the original copies of the documents you sent. With all the borrowers writing dispute letters all the time, yours can easily get lost. If you have the original copies, you will not have a hard time producing a new letter. You may check the instructions at the back of your report for everything to go smoothly.
There are other reasons why your credit is bad. This happens when you are not current with your payment. If you want to improve it, better start paying your dues on time. Avoid missing your payments as well because this can definitely lower your score. Talk to your lender when this happens. You may be able to reach an agreement to prevent this from being reported. You should also pay off some of your loan. This will give your credit a boost. Aside from that, it will be easier for you. This will make your monthly dues more affordable.
Before you purchase a property, check your credit first. Make sure that it is good so that you will get better terms. This will also make things easier for you.