The impact of credit record on loan for house purchase

The impact of credit record on loan for house purchase Unless you are buying a house with cash, it is important to make preparations for a loan before buying a house. First of all, please adjust...

Unless you're buying a home with cash, it's important to prepare for a loan before buying a home. First of all, please investigate your own credit record, because for banks, credit record and score are important basis for measuring personal credit value. Whether the bank is willing to lend to you, whether the interest rate you get is high or low, personal credit record and score play a big factor.

According to the Fair and Accurate Credit Transactions Act, everyone can get their own credit record report for free once a year. This report is provided by three major credit reporting companies: Equifax, Experian and TransUnion. The easiest way is to go online to AnnualCreditReport.com to apply for free. If you want to know your credit score (Credit Score), you need to spend money to purchase it. Currently, there are many agencies on the market that provide integrated inquiry programs. You only need to spend more than 100 yuan a year to inquire your credit report and score without limit. Please rest assured that inquiry of your own credit record will not affect your credit score. Therefore, in order to understand your credit status and avoid surprises when purchasing a house with a loan, it is recommended that you check your credit record at least every few months, and at the same time, you can avoid becoming a victim of credit theft.

After getting the credit report, please check in detail whether the personal information is correct, such as: name, address, birthday, etc.; whether there are any unknown accounts, such as: credit card accounts, loan accounts, etc. that you do not hold, and whether there are any accounts where you pay on time every period but have a record of late payment. If there are any errors, you have the right to submit proof to them and request corrections. A bad credit report may make your loan interest rate higher than others, or even cause the bank to reject your loan application.

Why does a bad credit record cause the bank to give you a higher loan interest rate? Because to the bank, your credit worthiness (Creditworthiness) is low and the risk is relatively high. How do banks assess your credit worthiness and risk? In addition to credit reports, banks also use credit scores to make decisions. There are several formulas for determining credit scores, but most lending banks use a formula called FICO. Its score range is between 300 and 850. The higher the score, the better the credit. There are ways to improve your credit score.

Improve your credit record and score so that you will not pay a higher loan interest rate than others when buying a house. If you have any questions about real estate, you are very welcome to call my hotline (480) 612-4545 or email to Rich@RichLiao.com.