Real Estate Buying & Selling Advice from White Realty Co, Union, New Jersey

White Realty Co's got some good advice when it comes to making real estate decisions.

Buying a Home: About Credit

Five Factors That Affect Your Credit Score

Credit scores range between 200 and 800. Scores above 650 are considered desirable for obtaining a mortgage. These factors will affect your score.

Your payment history. Whether you paid credit card obligations on time.
How much you owe. Owing a great deal of money on numerous accounts can indicate that you are overextended.
The length of your credit history. In general, the longer the better.
How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay promptly.
The types of credit you use. Generally, it’s desirable to have more than one type of credit—installment loans, credit cards, and a mortgage, for example.

For more on evaluating and understanding your credit score, go to AnnualCreditReport.com, which is where the three nationwide consumer reporting companies have set up a central website, a toll-free telephone number, and a mailing address through which you can order your free annual report. The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. The FCRA promotes the accuracy and privacy of information in the files of the nation’s consumer reporting companies. The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the FCRA with respect to consumer reporting companies. Do not contact the three nationwide consumer reporting companies individually, if you want to use the FCRA. The Federal Trade Commision also has more info about credit and loans on the FTC Credit site .

8 Ways to Improve Your Credit Score

Credit scores, along with your overall income and debt, are a big factor in determining if you’ll qualify for a loan and what loan terms you’ll be able to qualify for.
Check for and correct errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.
Pay down credit card bills. If possible, pay off the entire balance every month. However, transferring credit card debt from one card to another could lower your score.
Don’t charge your credit cards to the maximum limit.
Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.
Don’t purchase big-ticket items for your new home on credit cards until after the loan is approved. The amounts will add to your debt.
Don’t open new credit card accounts before applying for a mortgage. Having too much available credit can lower your score.
Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.
Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie Mae Foundation. To obtain a complete copy of the publication, “Knowing and Understanding Your Credit,” visit http://www.homebuyingguide.org.