Guest post by Jennifer Hart, Realtor with Harmony Realty Group LLC
Buying a house can seem like an impossible dream. I know from personal experience; when you first decide it’s time to set your sights on homeownership, you may not know how to make that dream a reality. I have spoken to many people who feel powerless on the home buying journey for many reasons, including simply not knowing where to start.
There can be many fears and anxieties about buying a home. What if my credit is bad? What’s going to happen if I can’t afford the payments? How will I come up with a down payment? These fears and anxieties can make you believe that you will never own a home. However, I am here to tell you that it is time to “Power Up”!
What does it mean to Power Up?
So, how do I Power Up? What does it mean to Power Up? I like the phrase Power Up because it is an act of empowering yourself to take control of your financial situation. You do this by becoming aware of what matters and what doesn’t matter on your journey to getting pre-approved for a home loan.
Empowering yourself includes knowing what a good number is for a credit score, knowing where and how to attain your credit score, and understanding ways to boost your credit score. I like to think of my credit score as a video game. I go out and slay some small lines of credit and bam, after 6 months, sometimes less, I Power Up! Just like that, my credit just jumps 20 pts and I’m one step closer! Where do you start scoring Power Up opportunities you ask? Well, let me tell you!
Secured Credit Cards
A secured credit card is a great tool that you can use to “buy an opportunity” to improve your credit score. A secured credit card allows you to prove you can handle borrowing money and paying it back in a timely manner. To obtain a secured card, you can check online or even at your local bank. It’s important to make sure that the card reports to all 3 credit bureaus.
Most secured credit cards start with a $300 limit. You fill out the application, and once approved, you bring in $300 to the lender and they provide you with a credit card. This is where the ‘secured’ portion of a secured credit card comes from – the card is secured by the $300 that you’ve put down. Think of it as a deposit, the lender will hold on to the $300 as collateral in case you don’t pay the bill.
Next, you’re going to use that credit card for 6 months. Buy gas, groceries, or pay utilities. Pay the bill in full every month. Don’t let balance on the card ever exceed 20% of the limit. So, in the example of the $300 secured credit card, you want to keep the balance under $60. Use the money you would be spending anyways to grow your credit.
This will boost your credit very fast and you will soon be getting offers from every credit company imaginable! However, Do NOT open another credit card, as tempting as that may be. Instead, keep doing what you’re doing. The longer you can establish a good payment history, the higher your credit score will rise. Power Up!
Take Charge of your Credit Report
The next way to Power Up is to go online and get a free credit report. My personal favorite app is Experian.com, you can also use Transunion.com or Equifax.com. These 3 entities are where all your credit history gets reported. You are entitled to a free copy of your credit report each year through annualcreditreport.com. Download your report and see where you may have some red flags. Late payments, maxed credit cards, or too many inquiries are some of the top red flags.
Usually, with credit monitoring websites and apps you can dispute credit issues that are too old and should have “fallen off of your credit” such as inquiries or credit cards from the past. Be sure to look up the laws on the timeframe in which your past bad credit can fall off. If there are credit items that you believe are on there as an error, or items showing unpaid which have been paid, you can dispute those as well.
Taking charge of your credit report and removing and/or reducing red flags will increase your chances of getting preapproved for a home loan. This is another great way to Power Up!
Power Up Today
Never feel afraid to take the first step towards improving your credit. If you find a lender who makes you feel hopeless or an agent who says you’re not ready, take matters into your own hands. Call another lender and find an agent who will work with you to Power Up!
We all have had moments where our credit wasn’t great, especially as young adults. Life happens. Don’t be scared and don’t give up hope. Feel empowered to take control! One step at a time, one level at a time, you will Power Up until your credit score is strong and your portfolio is solid. You can and will own a home!
Ready to buy or sell? It’s time to Power Up! Call Jennifer Hart with Harmony Realty Group LLC. at 567-454-9440. It’s time to take matters into your own hands and I am here to help!
Jennifer Hart – REALTOR®
Harmony Realty Group
120 E. William Street
Maumee, Ohio 43537
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