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Tips On How To Protect Your Credit
When Purchasing Real Estate |
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Protect your credit when purchasing real estate. With credit being harder to obtain, your credit score can affect your interest rate and be used to determine if you are "credit worthy," by a Lender, Landlord or Employer, to name a few.
If you are professional Real Estate Investor this could mean the difference between 80% financing and 65% financing. Your credit worthiness can also affect where you live, what type of job you have or can get, how much your car payment is, how much your rent or mortgage payment is, it can even affect the amount you pay monthly for car insurance.
Often times, your bad decisions can cost you as much as $500 more for a mortgage payment and/or higher interests on credit cards. It can even cause you to not qualify for various types of credit.
Avoid common reporting errors on your credit report. Are you a male that is a Junior and your Father is a Senior? It is not uncommon that a creditor reports the information of the father [Senior] instead of that of the Son [Junior].
It is also not uncommon if siblings with similar names, initials and the same creditors have errors as well. This happened when I was purchasing my first home. My sister and I have the same initials, our social security numbers are off by a few digits and we had accounts with many of the same companies.
With the new laws passed and theft of consumer credit information on the rise, there are now numerous ways to monitor your credit. You have the right to see your credit report and it is not hopeless to improve your credit score. However, it will just take some time and effort on your part.
The first step is to obtain a copy of your credit report. You can accomplish this by visiting www.annualcreditreport.com. The ONLY official site that will allow you to request your free credit report. Depending upon where you reside in the United States, the law states that you are entitled to one free credit report a year. If you desire to know your credit score, usually you will have to pay a fee for your scores.
If you are planning on purchasing an home or investment property within the next three to six months, it is best to pull your credit versus having Mortgage Planner or Loan Officer pull your credit. Your inquiry for your credit report WILL NOT show up on your credit report. Too many inquires sometimes implies you are shopping around or trying to apply for a lot of credit at one time. Either way, neither scenario is good.
Below are some tips for maximizing your credit:
- If you are a Real Estate Investor, consider buying several investment properties in cycles of 30 to 45 days. This will limit the amount of times your credit is pulled.
- Place a fraud alert or an alert system on your credit file so you do not have a inexperienced Loan Officer pulling your credit several times in a week's time which could lower your score as much as 20 to 30 points. This could make the difference between being an A paper borrower and a sub-prime borrower.
- ALWAYS request that your Mortgage Planner or Loan Officer provide you with an "Authorization to Pull Credit" form, this will add a layer of protection to ensure your credit is being pulled with your knowledge and will also limit the amount of times it is being pulled.
- Never give your social security number over the phone until you have verified that the Mortgage Planner or Loan Officer is a qualified professional.
- Pull your credit yourself every 6 to 12 months to check for any errors or possible fraud. This will save time when you are ready to purchase home or investment property.
- Consider paying for credit protection so you do not incur costly legal fees to clear your name and your credit.
All is not lost with regards to your credit. Time spent in the beginning will pay off in the long run because you will be more informed of any possible issues.
About the Author
Reston Expert, Jennifer V-E Johnson is from Reston, Virginia and has lived in the Washington Metro Area since 1976. She earned a BA degree from the University of Virginia in Charlottesville.
All information deemed reliable but not guaranteed. Limited consent to preprint or republish this report may be posted, reprinted, emailed or faxed as long as the copyright and credit reflect "Courtesy of Jennifer V-E Johnson, Reston Expert and WashMetroHomes.com Real Estate."
VA Real Estate Broker, Reston, Fairfax County - Firm License
(#0226 021519) and Individual License (#0225 083246)
Circulated by WashMetroHomes.com
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