Tips and Strategies for Building and Managing Your Credit

 Good credit has lasting financial benefits but building credit can look like a huge task. The trick is the more you practice good credit habits, the better your credit will get. There are several things you can do to build, rebuild and improve your credit. Here is what you need to do to start the process.

Build Your Credit

One of the best ways to do this is to apply for a secured credit card. A secured credit card is guaranteed upfront by a cash deposit. If you deposit $500 then your credit limit will be $500. You will want to make payments on time and keep a low balance to ensure you are building your credit.

Another good way to help boost your score is to ask a family member to add you as an authorized user on their credit card. You will get a credit card with your name on it and the primary cardholder will set a limit on how much you can charge. This is a good way to manage a credit line.

A major loan like a student loan or car loan is reported to the major credit bureaus making this a great way to build up your credit. Paying your loan payments on a car or student loan will build good credit. Creditors like to see a history of on-time payments which shows you can manage your line of credit responsibly.

Keep Up Good Credit Habits

Make payments on time on everything such as your utility bills, credit card companies and other accounts. Also, you want to have different types of credits because having different types of credit improves your credit score. Accounts like cell phone bills cannot be included.

Don't just apply for a card and let it sit, use it on a regular basis. This keeps your credit utilization low. Your credit utilization ratio is the percentage of your available credit that you actually use.  For example if you have a $1,000 credit limit, ty to keep your balance under $300 which is around 30% of your credit limit.

Get Your Credit Back on Track

To do this, you need to make sure your credit report does not have any errors. Knowing your credit score is a big plus to having an idea of your financial holdings. Getting a credit report from one of the credit bureaus will show you your credit activity, your credit history, and the status of your accounts. If there is an issue or a change in your financial situation, contact a creditor directly. They will work with you to create a payment plan.

Overall remember, that the best way to handle your credit is to live within your budget and avoid bad credit. If you do find yourself with bad credit, catch the problems early.

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Freddie Mac Wants To Help Renters Build Up Their Credit Through

 Renters now have a chance to use their rental payments to help build their credit scores. Freddie Mac has a new program that allows renters to use their on-time monthly rent payments to build up their credit. This is good news for the renters but also for the owners or managers of rental properties as an incentive. Property owners or rental managers can now report on-time rental payments to the credit bureaus.

This new program's purpose is to help those who do not have a credit score. It is reported that 45 million U.S. adults have no credit score. In fact, less than 10% of renters currently see their on-time rental payment history reflected in their credit scores. This is preventing many U.S. adults from getting some of the best mortgage rates in order to purchase a new home.

“Rent payments are often the single largest monthly line item in a family’s budget, but paying your rent on time does not show up in a credit report like a mortgage payment,” says Michael DeVito, CEO of Freddie Mac. “That puts the 44 million households who rent at a significant disadvantage when they seek financing for a home, a car, or even an education. While there remains more to do, this is a meaningful step in addressing this age-old problem.”

Esusu Financial Inc. technology is used by Freddi Mac to report rental payments and rental data to all three credit bureaus. When a renter misses a payment, it will automatically unenroll renters. As an incentive, Freddie Mac will allow closing cost credits on multi-family loans to those who chose to use the Esusu platform.

“At present, the most common way for rents to be reported to the credit bureaus is when there is a missed payment that has gone to a collections agency,” says Alexis Sofyanos, senior director of Equity in Multifamily Housing at Freddie Mac. “Freddie Mac wants to flip that script, so that renters who pay their rent on time and in full each month get credit for doing so, while also putting in safeguards for the most vulnerable.”

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Tips To Making A Competitive Offer On A Home

Today's housing market is definitely a seller's market. A buyer has to stand out in order to successfully win a bidding war. Here are five tips to follow in order to set yourself above other buyers.

 

Listen to Your Real Estate Agent

Going at it alone is not a wise move when it comes to finding and purchasing a home. According to an article from Freddie Mac, purchasing a home can be very emotional and a professional can help an emotional buyer stay on track.

“Remember to let your homebuying team guide you on your journey, not your emotions. Their support and expertise will keep you from compromising on your must-haves and future financial stability.”

Understand Your Finances

Know what you can afford before you begin even searching for a new home. It is a must to have a complete understanding of your budget. Again, a professional can help you with this portion of the process. Find a mortgage lender who can get you pre-approved for a loan. Taking a pre-approval letter to a seller shows that you are serious and can follow through with your offer. Forty-four percent of homebuyers in the current market get pre-approved. In order to stand out, you must get pre-approved.

Be Ready to Move Quickly

The average property listed in today's market is receiving more than three offers in the first few weeks of being listed. This data comes from the National Association of Realtors' monthly publication called Realtors Confidence Index. This means as a buyer you need to be willing to make a move on the spot if you find the right home for your needs. Be prepared to submit an offer as quickly as possible.

Make A Fair Offer

Both the buyer and seller want to get the best deal possible. As a buyer, you do not want to overpay for a home, but you also do not want to give a low-ball offer. If a seller receives a low offer, they might question how serious you are about purchasing their property. Your Realtor will be able to guide you in the decision when it comes to your offer price. You will want to make your offer based on the market value of the home.

Be a Flexible Negotiator

A seller has the right to accept an offer, reject it or counter with an offer. In today's market with such little inventory and so many buyers, you must stay flexible with things such as move-in dates, a higher offer price than the home is listed for, or minimal contingencies. When it comes to contingencies, conditions you set that the seller must meet for the purchase to be finalized, Freddie Mac warns to stay firm when it comes to a home inspection.

Even in today's hot market, buyers can find and purchase the home of their dreams for the right price. Remember to always contact a Realtor who can help you along the way.

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