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There is no doubt that owning properties is a major part of the American Dream that we all covet. It makes sense that we look for ways that we could use to improve our credit scoring. If you have had grandiose dreams of being real estate owners, you must start with the fundamentals. Credit scoring has become an all-ever important part of the whole house-hunting process. Ask many couples who want to own a home and they�ll tell you that their poor credit scoring keeps them away from the realization of the American Dream. But are there any magic wands for them to use to improve this key component of the transactions?
Time and discipline are of the essence after all. It takes time to build and remedy a bad credit history. The dream houses that have just come on the market won�t be around for long. There�s still the opportunity of finding new ones though. As more and more individuals have discovered the source of riches in real estate buying and selling, we are now dealing with a booming housing market. Buyers are taking advantage of the historically low interest rate to purchase new properties. More and more individuals with big amount of cash are following the population move and the increments in the housing market. For example, many Bay Area homeowners have been cashing out on their properties. Years ago, they bought low, poured some money into rehabbing these homes and are now selling high, really high. They sometimes sell the same home for three times as much. With all this cash, they decide to relocate to various places in the San Joaquin Valley which has seen a high demand for housing, schools, higher-end retails. Many national retailers such as Wal-Mart, Kohl�s and WinsCo have already made the various Valley counties their home. The comparatively low living costs of counties ranging from Bakersfield, Visalia, Kern and Tulare, Fresno, Madera, Modesto, Merced have attracted their share of new residents. Along with these equity refugees, come many well-known builders and architecture firms. This new pouring of residents has made it more difficult for local residents to find affordable homes.
Let�s not digress from the ever-present needs of watching our credit scoring. If you want a homeloan, your mortgage lenders will pull your credit history which can be found in any of the three giant credit reporting agencies. The best thing to do is to be sure of what your credit report looks like. Close to two months ahead of pounding the market in search of your dream property, order the credit report which will open many closed doors. It�s better to take a look at the reports generated by the three giants: Experian (888) 397-3742, Equifax (800) 685-1111, and Trans Union (800) 916-8800. . If you are not comfortable with the interpretation of the scores, ask your mortgage broker or lender to explain it to you. Most of the times, they will make recommendations to you if they see something that can be fixed immediately.
The reality of things is that these three companies are watching our spending behaviors. They are keeping tabs on what we do with our good credit. Some industry insiders have come to say that �The credit score is fast becoming an internal passport to everything for consumers.� From mortgage lenders, banks, to credit card companies, our score is being scrutinized. In the past, it was mostly reserved to facilitate home and car transactions, but now more and more people are using it because they don�t want to take a chance. The electronic files of our credit history are growing year after year. Credit expert Evan Hendricks has just published a book on the subject. It�s titled, �Credit Scores & Credit Reports: How the System Works, What You Can Do.�
If you have a good history of managing credit, you should not worry. But that is not the case of many individuals and couples. Among this group, we find new immigrants to this country, widows who suddenly find themselves poor and with no history of managing credit. They don�t have it at all. And lenders will be very skittish, reluctant about lending money to such borrowers. Establishing your credit does need to be this hard. You just have to bite the bullets to start with. High interest rates may be common. Get a few credit cards and pay your bills on time with them. Pay any balances you have on them. Some credit companies are exploring alternative ways to score consumers with no credit history. Fair Isaac Corp wants to launch a new and expanded credit score. The new Fair Isaac scoring model will add the following elements to your files: payday loans, overdraft patterns on checking accounts and retail payments such as furniture on layaway or mail-order book.
There is a new push to use customers� credit ratings all over the country from the cellular telephone companies to the giant insurance companies. In fact what these insurance companies want to do is to be able to set high premiums, hit consumers with poor credit ratings with higher fees. Their explanations for such fees are that the risks are greater. For insurers, using credit-based pricing has leveled the playing field. California is one of the states that has passed restrictions to this practice with Proposition 103.
There�s no reason to believe that the credit system is all that bad. In fact, it has allowed widows, minorities, immigrants and women to become borrowers. The rigid and subjective criteria of the past that were used to determine credit favored a certain group of the population.
Now, the key to your American dream is already in your wallet. It�s in your hands. Depending on how you manage your credit with the small purchases, you�ll be ready for the major ones. Lenders will be happy with you. They won�t have to close the doors on your nose. After all, what are niceties and pleasantries with a final rejection of your loan request?
