Four Things You Need in Order to Buy a Home: #2

2) Credit

Credit history shows your willingness to pay your debts. A credit report will provide a creditor (mortgage lender) with a seven - 10 year history of your credit.

Lenders use your credit history to determine if you have paid your other creditors on time and if you are likely to pay them back. The more credit history you have of paying your creditors on time, the better your financing choices will be. (It should be noted that you don’t necessarily have to have traditional credit history to get a mortgage: we may be able to use landlord and utility references.)

Less than perfect credit? A few “dings” on your credit will not prevent you from getting a mortgage. Most importantly, your good credit history may better represent you as a favorable risk than a few late payments. Even if you have significant derogatory credit, there are temporary mortgage solutions that you can later refinance as your credit improves over time.