Credit ratings are generated by three credit agencies (Experian, Equifax, and Transunion). They each use a differing methods to calculate a numerical credit score that reflects your credit history. The higher the score, the less risky you are as a borrower. Specific activities can have a adverse influence on your rating and could possibly cause you to get denied for a home loan. Below are advice for potential MA home buyers on credit activities to avoid before buying a home.

Credit Activities To Avoid Before Buying A Home

Delinquent Behavior

Missing payments demonstrate poor credit habits and consequently reduce your score. How many payments you have missed (30, 60, or 90+ days) and how many times you are late also play a role. Delinquencies remain on your credit report for a very long time.

Collection Accounts

If you are really behind on payments and a lender has given up on their own attempts to obtain anything from you, they may move your debt to a collection company. This appears on your credit report. The information will stay on your credit file even after you pay off the debt.

Lender Charge-off

If a creditor is unable to collect the complete balance that you owe to them, they may "charge-off" the uncollected amount. This may apply if you entirely neglect to pay or if you settle for a lower amount. Charge-offs appear on your credit file for 7 years. Future creditors will view this item and debate how likely you are to continue with that behavior.

Matters of Public Record

Bankruptcy, tax liens, judgments, foreclosures, and other similar matters are part public record. Regardless of whether you settle those accounts, the initial reporting stays on your credit score. Particular things appear for seven to ten years whereas others (such as liens) remain forever. Obviously, it is critical not to let issues get this far.

Advice For Potential MA Home Buyers

All of the credit activities to avoid before buying a home noted above make you a risky borrower and may cause higher mortgage rates or completely stop you from getting loans. Demonstrate responsible behavior and it will save time, money, and disappointment when it is time to buy real estate. These are the best advice for potential MA home buyers. this includes only a few common credit mistakes. Speak with a credit professional for information on your particular situation.