Five Tips for Building Your Credit Score

This year I have had three prospects who previously paid cash for all of their purchases and, therefore, had no credit score. Consequently, they were not able to purchase a home and had to lease while they built a credit history.

It is fine to pay cash for items that are in the lower price point, but when it comes to purchasing real estate, seldom is cash possible for most consumers.

A credit score is the vehicle that mortgage companies use to evaluate a borrower. The higher the credit score, the better the loan terms will be, but one must at least have a score to be considered for a loan.

There are plenty of warnings about abusing credit, but rarely do you hear about how to effectively use credit for the benefit of the consumer. Credit, used wisely, is essential in today's world. No credit history means no mortgage until credit is used for at least six months to establish a history.

If a home purchase is in the future plans, establish excellent credit now so that a mortgage can be obtained when needed. Having credit is essential to achieving the dream of owning a home. Put homeownership in your future by establishing a good credit score.  

One of my mortgage consultants, Anthony Rice provided input for the following tips. [Contact him at www.academymortgage.com/anthonyrice for more information on getting fiscally ready for homeownership]. 

Here are five tips to establish and build a credit score: 

1. Establish credit with two or more entities.
2. Keep the balances of credit cards at no more than 30% of the credit limit.
3. Purchases can be at all price points, not just large purchases.
4. Keep purchases at an affordable and manageable level.
5. Pay bills on time for all purchases made.

For help with your house hunt or other housing information, contact Cascade Heights resident and Prudential Georgia Realty Associate Broker Shirley Simmons, CRS, GRI, at www.shirleysimmons.com.