5 Tips for Establishing Credit

If you dream of one-day owning your own home, you’ll most likely need to finance its purchase. Mortgage lenders will want to review your credit history to evaluate whether or not you’re a worthy borrower. So how do you get started establishing a credit history? Here are four ideas for you to get you started:

Open a bank account
Open a bank account and use it responsibly. This is the first step in establishing a financial history.

Get a co-signer
A good way to establish credit is to piggy-back on someone who already has good credit history established and is willing to co-sign, but be aware that any default of credit on your part affects the credit of the co-signer.

Secured Credit Card
Apply for a credit card. Shop around and only apply for a card if you can meet the lender’s requirements. Responsible use will help you build a good credit history. Pay all your bills by their respective due dates and always pay over the minimum amount due.

Use Your Credit Cards
Your credit score is highly based upon the ratio of debt to you incur to your total credit line and your ability to pay that debt on time so using your credit cards will establish examples of this. Try to keep the ratios low by paying your debt down every month. And NEVER EVER close a credit card, even if you don’t use it. It will count towards your total credit line.

Department store and gasoline credit cards
Since gasoline credit cards are not revolving (cannot carry a balance forward month-to-month), often they are easier to obtain than regular credit cards. Similarly, some department stores offer revolving credit for a specific purchase and this is easier to obtain. It is also a good way to establish credit.

If you’d like to chat more about steps you can take now that will help make your dream of homeownership a reality, I’d be happy to offer my expert advice. Just give me a call.

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674 E. Empire Street, San Jose
2 bedroom + bonus room & 1 bath
Approximately 1,000 (permits unknown)
$495,000
Welcome Home! Recently remodeled craftsman-style home incorporates original charm with modern day finishes! Features bamboo flooring, french doors, gourmet kitchen with granite, remodeled bath, renovated back yard and 2-year old roof! Third room can be used as an office, baby’s room or a sitting room. Home is approximately 1,000 square feet – permits unknown (assessors office 884). Located across the street from a park and a short walk to Japantown and Watson Dog Park!

Time to Buy or Sell – Mortgage Rates at Record Low

It’s official. According to Freddie Mac, 30-year fixed mortgage rates have hit a low of 3.91%. What does this mean to you, you ask? Well for one thing, it means that you can refinance that old loan you took out on your house back in 1994 when rates spiked. It also means that those who have been on the fence about wanting to purchase a new home in 2011 have even more reasons to do so. Continue reading “Time to Buy or Sell – Mortgage Rates at Record Low”

Great Reasons to Own a Home

“A man complained that [on] his way home to dinner he had every day to pass through that long field of his neighbor’s.  I advised him to buy it, and it would never seem long again.”     -Ralph Waldo Emerson

Ownership of real estate can provide a place to truly call your own as well as a way to provide a good neighborhood for your kids to grow up in, and freedom from the whims of your landlord. Yet some of the biggest advantages of owning a home are less romantic and more practical – in fact, there are wonderful financial advantages to owning a home: Continue reading “Great Reasons to Own a Home”