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Credit Score Check First Before Buying A Home

By Sally Maison
Published: Wednesday, March 3rd, 2010

Consumers looking to buy a home in these times may have a few hurdles to make, none of which are going to be easy. That is only to be expected considering how bad the economy was last year – and recovery will still take some time. One particular hurdle for consumers who want to buy their own home is their credit score.

Credit Score Check First Before Buying A HomeThese days, credit scores have become a byword in the financial sector. New developments in the credit industry, such as the new Credit CARD Act and its repercussions in the industry, is propelling the importance of credit scores to greater heights. Nowadays, consumers can barely make a financial move without their credit score being an important factor. Buying a home is just one of these.

For consumers who want to buy a home now, experts say that one of the most important things that they need to do beforehand is to check their credit scores.

In some places in the country, the housing markets have begun to show signs of stabilizing. This will most likely encourage consumers to once again consider buying a home when, just the past year, consumers were staying away from the properties market in droves. This will most likely help the economy of the country pick up. Before it comes to that however, consumers will still need to jump a few hurdles to buy their own home, not least of which is their credit score.

At the moment, the best credit score to have is 740. Consumers whose credit scores don’t quite reach that magic number will have to contend with terms having relatively higher interest rates or more expensive fees. The smart move to make would therefore be to check their credit scores beforehand.

A good idea for consumers looking for a home and who are not quite aware of their credit scores is to avail of the services of a mortgage consultant and have a pre-qualification check. One of the benefits of going using a mortgage consultant is that the consumer avoids checking their credit scores too much. When a credit score is checked multiple times, it will have a negative impact on the credit score and will actually bring it down. It may seem counterintuitive but it is the way it is.

For consumers who want to pull their credit scores up, the best way to do so is to pay off their debts quickly. For those who plan to make their home purchase in the near future, it is best to hold off canceling credit cards – even the bad ones. This tends to bring credit scores down and recovery can take some time.

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