When you are in the market for your first home, a more spacious home or a retirement it-is-time-for fun-place, you need numbers. Unless you are paying cash, which requires big numbers, your first concern is a down payment. However, be aware that some mortgage companies are waiving the down payment under certain circumstances. The numbers on your credit score are paramount. If you yearn for an attractive mortgage package, or any mortgage at all, your score is as valuable as the Dead Sea Scrolls or the Hope Diamond.

Life happens. While life is happening sometimes circumstances occur that adversely affect one’s credit score. No matter the reason for this disastrous dip in numbers, it has nasty consequences when you are contemplating the purchase of a new home. Do not fear. There are steps you can take to remedy this undesirable circumstance. Let’s look at what Edward and Natalie Davidson did when they were faced with a dismal credit score and the urgent need for a larger home.

Edward struggled through college (working two jobs). Natalie ran between her job as a receptionist and her classes. They were just able to pay their bills and eat. Since their jobs were part-time, neither Edward nor Natalie had health insurance when they discovered, to their delight and dismay, they were going to be parents in eight short months. The hospital bill, college fees and books and other necessities of the 21st century left their meager budget dangerously in the red.

The Plan

Edward graduated from college and was employed as an account with a small firm. Natalie was completing her senior year in chemistry. The struggling, yet indomitable, Davidsons were living in a tiny apartment with scant elbow room. Yet, they dreamed of a charming little home on a quiet tree shaded, children friendly street. The Davidsons developed a concise and determined plan to improve their credit and buy “their” house within two years.

10 Tips. To Do List.

  • 1. The most widely used index for home loans are FICO scores, these scores are obtained from the three national credit bureaus – Equifax, Experian and TransUnion. Therefore, we must determine our FICO scores and work to increase them if necessary. According to the experts we should review these scores one to three times a year. We should also look for errors that lower our scores. These types of errors are not uncommon.
  • 2. We must pay all bills on time–no exceptions–period. This is especially true of debt reported to the credit bureaus. Timely rent payments are imperative.
  • 3. Balances on current debts, with special emphasis on credit cards, should be reduced as soon as humanly possible.
  • 4. If necessary consult a credit counselor.
  • 5. Avoid with great vigor, any new inquires of our credit with the credit bureaus. Don’t open unneeded new accounts.
  • 6. If a new account is necessary, it should be paid on-time or early. Good payment records are very valuable. A guaranteed credit card may be a place to start.
  • 7. When possible set up automatic payments (though our on-line checking). Automatic payments cannot be overlooked or forgotten.
  • 8. Closing an account does not help our score. It is better to keep a reasonable balance and establish a good paying record. Again, when possible use automatic payments.
  • 9. Open a savings account and contribute to it regularly (automatic contributions are good).
  • 10. Continue to build a long term employment history.

The Future

The Edwards were off to a rough start in their financial life, nonetheless they have a plan and they are adhering to it with tenacity a bulldog would envy. A negative financial history is definitely not the end of the world, though it can certainly be frustrating. Credit can be rebuilt in a relatively short period of time; some experts say approximately three years.

Your Plan

If you would like to improve your credit score to buy your first home, make a plan and begin implementation today. It won’t be long before you enjoy a welcome increase in your numbers. Sometimes taking out a guaranteed issue credit cards can be an advantageous beginning. The credit card company should report to the major credit bureaus on a regular basis if they are to help you re-establish good credit. If you would like to begin your journey to admirable credit and believe a credit card will meet your needs, apply on-line with complete confidence. Sit back, relax and compare the advantages and disadvantages of various cards. Good luck on your journey!

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