Improving your Credit Score will help you buy your next House

In celebration of National Homeowner’s Month this June, we at the Dulcie Crawford Group are determined to help current and future homeowners in their real estate ventures. For this blog, we will be talking about one of the most important things that homeowners have to consider when considering entering the real estate business, the finances.

Buying a home is not a one-dollar endeavor. Oftentimes, buyers have to take out loans so that they would be able to obtain funds to purchase their new home. Obtaining loans isn’t just as easy as going into a bank and applying for a loan. There are specific requirements that one must accomplish before applying. Approval of the loan also requires specific standards and factors that the buyer must have. Knowing the type of loan you want to apply for is also important prior to securing the loan. An important factor in loan application is the Credit score. 

Knowing a Credit Score

Firstly, what is a credit score? A credit score is a three digit number that allows lenders, such as banks, to determine whether the person is trust-worthy or not. A person’s credit score is determined by multiple external factors, such as credit history, repayment history, types of loans, etc. The higher your credit score, the better your chances of securing a loan. The credit score system was developed by the Fair Isaac Corporation, better known as FICO, and the system they built assigns a three-number score that ranges from 300 to 850 based on various analytical factors.

Your credit score can affect how you loan money from banks, especially for those with bad credit scores. Your loan applications might be rejected, or they might allow you to obtain a loan but you would have to pay interest that differs from what they usually offer. Homeowners can determine their credit score, and once they do, they can have a clear idea of the ways that they can obtain the finances necessary to purchase a new home. Homeowners looking to upsize or downsize can also apply for a mortgage loan, but credit score still plays a part whether it gets approved or not. Essentially, having a good credit score can make buying a new house easier for those who don’t have the direct funds necessary to make a purchase.

Credit Score Recommendations and Issues

A recommended credit score to have when you plan on becoming a homeowner in Las Vegas is around 620 or higher. Having a credit score around this level means that you are trustworthy and responsible, allowing lenders to grant you an opportunity to apply for a loan. You will be able to apply for most mortgage loans, such as the VA and FHA loan. If you have a credit score of  around 580, you will still be able to apply for those loans but you might have a higher interest to pay. Those with credit scores lower than these might have to show lenders that you are a trustworthy individual. However, these numbers are subject to change as credit is constantly fluctuating and adjusts alongside the market.

Improving your Credit Score

The problem arises when you take all of these into consideration. If you already have a bad credit score, will you never be able to enjoy owning your own house? Not really. Credit score, while difficult, is not impossible to fix. The fix is simple. If you are capable of showing creditors that you are a responsible individual, your credit score will improve. One of the most important factors in credit score improvement is improving your credit utilization. Credit utilization is the percentage of credit you have used compared to credit you are allowed to obtain. You must be able to properly utilize your credit while still being able to pay your credit on time. This will show lenders that you are capable of obtaining credit and paying it on time, and therefore they are inclined to trust you when you would apply for a loan. 

Another thing you can do to improve your credit score is not maintaining a balance on your credit cards. This shows lenders that you are capable of paying your credit on time even if you use your credit often. You must also refrain from making big purchases using your credit prior to application for a loan. These purchases will show up on your credit reports, and once lenders review them they will see that you are paying for other big purchases and will be less likely to be able to pay all of them on time.

Improving your credit score is also not a one-time affair. Your credit score is improved after continually developing proper spending habits, and following most of our tips above. Once your credit scores improve, and your loans are approved, you are now one step forward to owning your house. Congratulate yourself on becoming one step closer to being a Las Vegas homeowner.

Taking all of these into Consideration…

The last step on becoming a Las Vegas homeowner is finding the perfect dream house for you. Knowing how credit scores work, you would want to buy a house that is well-within your budget. After all, it pays to be practical. Las Vegas is a hotspot for tourists, both local and international, thus it is bound to be a collection of multiple homes for sale. How will you know which house to buy, or which houses are being sold for that matter? That is where we at the Dulcie Crawford Group come in.

Our last tip for homeowners is to connect with a professional who is well-acquainted in the area, preferably someone who has seen the rise of Las Vegas and is an expert in all matters real estate. Dulcie Crawford is a native Nevadan and she has the perfect amount of experience to be able to guide you in the purchase of your newest home. Equipped with her vast knowledge on real estate, she will be able to tell you precisely the dream house you are looking for, where it is located, and how it fits into your budget range. Let’s give credit where credit is due, Dulce Crawford is the right agent for you.