Purchasing property is a big investment and something one should consider carefully. However, the good news is that property generally appreciates in value rather than depreciating like other assets (such as vehicles). So, what’s the first thing one has to consider in order to buy a new home? The simple answer is this: your credit health and credit score.
Having good credit health, credit history and a high credit score can be advantageous. When it comes to loan applications, banks and lenders generally look favourably on customers with an impressive credit background, and loan approval processes tend to be faster and more seamless. It’s important to note, however, that although good credit health can be beneficial, it’s not guaranteed to get your loan applications approved as banks and credit providers look at various factors before deciding to extend credit to a customer.
Want to know how to get faster loan approval for your dream home? Here are some tips:
Get a full, detailed credit report.
This is the first step in knowing where you stand, credit-wise. A good credit report should ideally outline your credit health and credit behaviour in detail, as well as inform you of your credit score. Once you’re aware of these details, you’ll be able to see the areas which need improvement, and begin working on them to improve both your credit health and credit score.
Start paying your bills and credit obligations on time.
Making your payments on time is crucial to maintain good credit health. Missing payments or monthly instalments can really damage your credit health and make your credit score go down. If you’ve missed payments in the past, get current and stay current. If your credit score is low, responsible credit behaviour will help improve it in time.
Don’t apply for more credit than you need.
Take a good look at your spending habits and finances, especially credit cards. Don’t apply for more credit cards than you need, and be sure to settle the minimum monthly payment required for each card.
We suggest that you do adequate research before you make that commitment to buying a home, especially regarding loans, fees and other legal matters.