Posts Tagged ‘Credit problems’
Credit History vs. No Credit
Recently I have run into several first time buyers with a unique credit problem.
In our initial discussions, prior to looking at homes, one of the questions I ask is “How’s your credit.” Often I get the following answer “My credit is excellent; I don’t have a mark on it.”
I always suggest they get a mortgage pre-approval letter, as it gives them more leverage to bargain with and lets them know what they can afford. I will refer them to several loan brokers I trust or suggest they check with their preferred financial organization. Three out of the last four I referred came back with the same response from the mortgage company, “Yes, you do not have bad credit. In fact you have NO credit.”
A lot of people do not understand that having no credit history can be as bad as having “bad” credit when it comes to financing a house. Establishing a good credit history is a very important part of modern day life. This is especially true today when your credit history is used to determine so many things in life such as mortgages, insurance, job offers, etc. Avoiding credit in your life can have many negative repercussions in all areas of your life.
Responsible credit takes work and does not just happen. Building a good credit history does not occur over night and takes planning to accomplish. You have to understand and know your financial position and make good decisions based on that position.
Begin building your future today.
