We often have questions we feel like we should know the answers to or need advice about a personal finance situation that we are too embarrassed to talk about publicly. Feedback Friday allows people to anonymously submit a question to the credit union where it can be featured with advice, tips, and encouragement to help those seeking answers. Below is just such a query:
“My credit is a mess, and I want to seriously focus on buying my first home, but bad financial decisions from my past keep hindering me from reaching my goal. How and where do I get started fixing this mess I’ve made?”
First, let’s acknowledge what a fantastic goal this is! Your credit score is so important to healthy finances and saving money, so taking the time to improve it is a worthwhile investment.
In order to secure a first mortgage, you’ll need to have a score of at least 640. But the higher you can get that number, the better your interest rate will be.
So, how do we get there?
Start with a copy of your credit report and address each of your credit lines, item by item. If you know what you’re doing, you can obtain your report for free within Online Banking or Mobile Banking with the credit union. OR if you think you need assistance, schedule an appointment with Member Services to have them help you understand the document and answer any of your questions.
The credit union also hosts Credit Score seminars throughout the year where you not only learn how credit scores are calculated and how to improve them, but also receive a one-on-one with a Member Services Representative to go over your credit report. >> Free Home Buying Seminar, March 9 at Bluff Creek
Once you have your credit report, you can then focus on correcting the negative factors and creating a financial goal timeline. This means the percentage of accounts you’d like to have taken care of by a certain time (or in your case, when you’d like to buy your first home).
In the mean time, you should continue to pay your bills on time, keep your credit card balances low, and make sure not to close any credit cards you’ve had for a long time.
We hope this is a great start to you becoming a home owner soon!