Clean Up To House Up Your Credit History And You
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
Clean Up to House Up: Enhancing Your Credit History
Summary:
Life's blemishes?"whether on clothes, furniture, or credit histories?"can be removed. A poor credit history shouldn't stop you from owning a home. While late payments, repossessions, write-offs, and bankruptcies can leave significant marks, they can be cleaned, albeit not overnight. Improving your credit likely requires at least a year of effort.
The Connection Between Homeownership and Credit History:
Home mortgage lenders don't provide loans without assurance of repayment. This is why they scrutinize your credit history before granting loans. Your credit history indicates your reliability in repaying debts. Understandably, flawed credit histories make lenders uneasy. Imagine you were a lender?"wouldn't the idea of not getting repaid make you cautious?
Identifying Issues:
While lenders prefer borrowers with impeccable credit, they remain open to those with minor blemishes. They often overlook late payments and reporting errors but view unpaid debts or those written off by creditors less favorably.
They particularly watch for old, outstanding debts and any incurred in the last 12 to 24 months.
Taking Control of Your Credit:
If your credit history shows issues, don't rely on a maid or credit repair companies promising quick fixes. Real improvements rely on your proactive efforts:
- Pay Bills on Time: Regular, timely payments positively impact your credit history.
- Avoid Additional Borrowing: Stay focused on paying off existing debts before taking on new ones.
- Strategize Debt Reduction: Create a plan to eliminate debts efficiently. Many lenders avoid offering loans to individuals with excessive debt. Ideally, mortgage payments should not exceed 36 to 38 percent of your monthly obligations, which include credit card payments, child support, alimony, and student loans.
Remember, blemishes aren't permanent. Just as you can clean a coffee table, you can improve your credit history with dedication and effort.
You can find the original non-AI version of this article here: Clean Up To House Up Your Credit History And You.
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