Many of us over the course of our lives have learned that not all choices are right for us and our situation. We have made what appeared to be good choices but for us they didn't work out the way we intended.
We hear about credit all of the time when looking into financial ventures. Anytime there is a need to purchase something that costs more than the cash you have in your pocket, or in an account, you can guarantee credit will be used or involved. This is why credit is so important in the financial industry. Every business large or small and even individuals will be given choices based on credit. We will be limited or freed to choose based on a "risk score" that we have been given. Most people haven't even seen their credit. How can we manage something we have never seen?
If you haven't seen your credit in the last year it is time to get a copy and look it over. Our Credit can be a reflection of our good or bad choices we are making, and have made. There are many credit bureaus but only three Major bureaus that we need to worry about. These are Experian, TransUnion, and Equifax. Most car loans, home loans, payday loans, title loans, personal loans, and land or equipment loans are given based on the "risk score" obtained from these companies. Not all trade lines are reported to all three major bureaus. To get a good picture of your credit you will need to have one report from each one.
With knowledge of what is on your credit report and some goals or dreams we can start to form a plan on where we want to go. Or can we?
First we should understand what credit is. How our choices can affect our credit. Lastly how credit affects our mortgage and other types of loans. By understanding these factors we can better control our financial outlook and most importantly our money!
When applying for a home loan a FICO score of 620 or better will get you decent rates. If you have a score of 700 or better you should have access to the best rates on the market. With a score of 580 or lower you are looking at the high rate loans. This area is considered sub-prime, and if you can, avoid getting a loan when your credit is this low. With a high rate loan you will end up paying hundreds of dollars more a month. You also may not qualify to borrow 100% of what you want or need. You may have to make a down payment up to 20% of the value of house you are looking at.
It's safe to say that good credit = lower payments.
"Thank you, thank you! I am thrilled that my Trans Union report is now perfect! Your efforts are greatly appreciated!!!"
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