Deciding whether one is ready for homeownership or not is a very important decision – a watershed decision, must we add. You have to be sure of a number of things before committing to buy a home, and that includes, but is not necessarily limited to making sure you earn enough money and that you really want to become a homeowner. But there’s more to buying a new home than wanting to buy one or knowing that you make enough to pay your mortgage bills.
Many buyers don’t bother to check their credit before buying a home, and that leads to a lot of false expectations. But why should you check your credit? The reasons are actually quite simple. For one, you may find out that your credit score isn’t that high after all, and that may preclude you from qualifying for a mortgage.
Before the great housing bubble of the late 2000s, most lenders only required a credit score of 500, but that won’t cut it these days. Not by a longshot, actually, as most lenders require a FICO score of 680 or more. But increasing your credit score takes more than just making timely bill payments; your credit score may decrease due to a number of other reasons aside from late payments, such as repeated credit inquiries or a lack of history.
Another reason why credit scores may be lower than what one may think is identity theft. People who end up illegally accessing your personal information could open accounts in your name, and since that requires pulling your credit, that alone can lower your score. And we haven’t even got to the possibility of these unscrupulous individuals running up their bills and not paying for them – after all, why should they pay for something that isn’t in their name? Worst of all, it may take years to resolve credit issues brought about by identity theft.
Lastly, you also have to take into account the chance that your creditors may have made a few errors on their end. This isn’t meant out of malice, definitely, but misreporting certain information could take its toll on your credit score, and prevent you from qualifying for a mortgage. You can dispute these errors with your creditors, but if they don’t want to play ball, you can file a dispute with the credit bureaus or with the FTC.
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