How to Build Credit Before Buying a Home

If you’re not a personal finance nerd, making a foray into the world of personal credit and home financing can feel a little overwhelming. You probably just want to buy a home. Having a good credit score will be a huge ally in the process! You can begin building, repairing, or improving your credit score by taking some simple steps. If you’re not trying to buy a home in the immediate future, this is actually the perfect time to start focusing on your credit! It takes time to build a strong credit score, and the steps you take don’t have to be complicated.

First, Find Out What Your Credit Score Is

When you work on any sort of problem, you want to eliminate as many unknowns as possible. In the case of your credit score, not knowing your starting point is a huge unknown! You should first find out what your current credit score is. There are plenty of options for free credit reporting of which you can take advantage. You may have heard that “checking your score causes it to go down.” If you’re constantly checking your credit score it can be affected, but that’s not necessary once you have a starting point as you prepare to buy a home.

Start with a Practical Credit Product to Build Your Score

If you’re starting with a limited credit history, you should choose a practical credit product to get going. Secured credit cards take an up-front security deposit. They’re relatively easy to obtain, and managing this card is a great starting point. You can set up recurring purchases (subscriptions) to be paid with the card to start building your credit. Retail cards with rewards points can also be an enticing option. While these types of products might work well for your lifestyle, you should note the high interest rate and ensure that the balance on the card is paid in full, monthly.

Adding to Your Credit History Can Build Your Reputation

Your credit score is basically a confidence measurement of financial institutions in your ability to manage borrowed money. Building a history of good credit — having access to borrowed money and repaying it on time — takes time. You can check with your landlord to see if that person or institution reports your rent payments to credit bureaus. This contributes to your credit history as well. You can also become an authorized user on the credit card of a family member with good credit.

When You’re Ready to Look for a Home, Talk to Bill Swanson

Purchasing a home is all about being ready. You need to have your list of priorities ready when you begin to look, and you need to have your financing ready so that you can move quickly. Building your credit score is part of being ready. When you’re excited to move forward with a home purchase, talk to Bill Swanson! Bill is an experienced real estate agent in the Omaha area who is ready to help you find the right home for you. Talk to Bill Swanson in Omaha, NE at 402-679-6566 to learn more about your new home.

Buying or Selling a Home in Omaha? Call Bill Swanson Today!

As a long-time resident of Omaha, I know the area and the surrounding communities intimately, and can give you access to information that you could never find online. If you want to know more about the community, are looking to buy a home in a new one, or need the help of an agent to sell your home quickly, conveniently, and successfully, then email [email protected], or call (402) 679-6566.