Do you know your credit score? Gaining a clear understanding of your score in combination with how credit actually works can save you a lot of time and effort trying to make up for previous financial mistakes that could have been avoided.

First and foremost, a credit report is calculated in consideration with your payment’s history, new versus old credit, different types of credit, and so on. However, there is a misconception that credit only concerns what has been paid off recently. For example, if you’ve stacked up a considerable amount of debt over time and then one day pay the entire balance off, this does not automatically send your score skyrocketing. Your score is an accumulation.

Think of it this way—if you are running a marathon and walk the entire time but sprint the last 100 yards, your time will not drastically change or get better. However, if you’re running that same marathon keeping up at a decent speed the entire time—your finish time will likely be much better.

The better your credit score is, the greater your chance of scoring a lower interest rate when you decide to borrow for your next piece of property.

Since lenders will be looking over your credit report, it may be a good idea to look at it yourself beforehand. Once a year every major credit card company allows you to order a free report so you are able to do just that. Utilizing this yearly self-check can help you identify any mistakes or errors prior to your broker viewing it so that you can take care of matters in plenty of time for your loan application.

It may be prudent to dedicate at least 6 months to this analyzation and credit improvement before you decide to apply for a mortgage because, as stated, you can’t make much of a difference is just a few days.

At Title Junction, we care about helping you stay informed throughout your real estate transaction. The experts at our title company have extensive knowledge about real estate not only in Cape Coral and Fort Myers, but all of Florida as well.

Have questions? Give us a call at 239.415.6574.

In case you missed it, check out our last Title Junction post: What Disclosures Are Used For Loans That Aren’t Covered By TRID?

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