Hey San Antonio! Here Are 5 Tips to Establish Credit For Real Estate
Whether you want to buy that first home or you want to buy real estate for a business, you
need to have an established history of good credit to get a loan on favorable terms. In this
article, we look at 5 ways to get you started off in the right direction with credit repair.
Get Your Credit Score
There’s an old adage that says, “If you don’t know where you are, you won’t know where to
go,” and this is true for your credit; if you don’t know what is your score, you won’t know if it
needs to improve.
So, the first step is to request a copy of your credit report. This report will have your credit
history as well as your credit score. Read the report and note any negatives such as late
payments or charge offs that knock your credit score down. Make sure these are accurate,
and dispute them if they’re not.
When you know your credit score, you have a better idea of what type of loan conditions
you may qualify for, and what you need to improve to get better terms.
Let’s say you don’t have a credit history and you want to build one. One of the best ways to
do that is to apply for a secured credit card. A secured credit card is one that’s backed by a
deposit you make upfront, and that deposit represents your credit limit. Once you get this
card, you use like any other credit card — buy items and make your payments on time every
month, and pay off the debt quickly.
Make sure you get a card that reports to all three major credit reporting agencies: TransUnion,
Equifax, and Experian. You’ll quickly establish good credit if you make your payments on time every month and pay off balances quickly.
Get Your Score Higher
But what if you already have credit, and it’s less than perfect? Well, in that case you need to work on building your score. Late payments are one of the main things that negatively affect credits scores, along with bankruptcies and charge offs. The key to building up your credit if it’s bad is to make your payments on time every time. Also, pay down your debt as quickly as possible.
Become An Authorized User
Sometimes, you can establish credit by becoming an authorized user on someone else’s card, like a friend or family member. When you become an authorized user, you gain access to credit and you can build a credit history, which helps you if you want to get a loan or a new line of credit. As with a secured card, make sure the card you’re authorized to use reports to the major credit reporting agencies so you get good marks for doing well.
Ask for a Co-Signer
The Phenix Group says, another way to build a credit history is to get a smaller loan with the help of a co-signer. A co-signer is on the hook for the money should you not pay, but if you make your payments on time every month and pay off the debt, it goes a long way to building up a positive credit score for the future.
People want a magic formula for building credit quickly and it is this — make your payments on time every time. Payment history comprises the bulk of your credit score, so making timely payments, and paying off debt quickly are the keys to building a solid credit score quickly.