Shopping for a mortgage? It pays to clean your credit report first

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If you’re ready to say goodbye to renting and hello to homeownership, you probably already know how important having good credit is. A good credit history and a good credit rating will allow you to get the best interest rate when applying for a mortgage. According to myfico.com, most lenders use scores created by the Fair Isaac Corporation (FICO). In general, a 670-739 credit score is considered good, 740-799 is very good, and 800 or higher is considered exceptional.

However, if you have a lower score and are having trouble with your credit, that doesn’t necessarily mean you can’t get a home loan. San Antonio residents David and Veda Reddic recently learned that there is help available for those who want to clean up their credit to buy a home. The Reddics got advice from David’s childhood friend Mike Franklin, a real estate agent at Berkshire Hathaway HomeServices Don Johnson Realtors in San Antonio. Franklin has been a real estate agent for 11 years and has worked with many clients with credit issues. He said that write-offs, credit report inaccuracies and too much debt to income are common issues that many people face. The first thing he suggests to his client is that he connect with a local lender who will review their finances and determine how much they can be pre-approved for. “With most problems, a good lender can look at their credit and tell them what to do,” Franklin said. He also said couples should know that a lender will take into account both their credit history and any debts, especially if they are applying for an FHA or VA loan.

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The Reddics, both in their late 50s, were working with a credit repair company but weren’t getting the results they wanted fast enough. Veda said she was skeptical about meeting with a lender at first because although David’s credit was okay, she had some imperfections on her credit report. However, once the lender explained what she needed to do to resolve these issues, she became optimistic. “What surprised me is that there are people out there who will help you clean up your credit, and I was so surprised that my credit wasn’t as bad as I thought it was,” Veda said. . “She showed me how to take care of three or four small items, and it worked.” It took the couple about two months to resolve their credit issues and get pre-approved for a mortgage. Now Veda is telling her friends and family not to be afraid to watch their credit report. She realized that they probably could have bought a house much sooner. The couple had been renting for 10 years.

“We calculated it and (they) spent almost $ 100,000 to rent this house,” Franklin said. “I see that a lot. A lot of people don’t understand that it’s easier to buy a house than to rent a house, and when you buy, every time you make a payment, you build equity.”

The Reddics closed their house on New Years Eve and moved out a few days later. “Coming home, walking into your own home, it’s a beautiful feeling, it’s a blessed feeling because I can come in and say it’s our home,” Veda said.

Credit Repair Tips:
• Check your credit report and dispute any inaccuracies
• Know your credit score
• Avoid late payments
• Pay off and repay debt
• Don’t apply for new credit cards
• Seek advice from a trusted lender

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