Low credit ratings have be burdening many Millennials, and preventing them from purchasing a home, according to a survey by TransUnion. The survey revealed that 32% of Millennials plan to purchase a home within the next 12 months, however 43% currently hold a subprime credit rating. On the other hand, older generations intends to purchase their house is more aligned with their finances, as 17% of people ages 35-54 plan on buying a home within the next year, which is the same percentage of that age bracket that has a super prime credit score.
TransUnion Senior Vice President Ken Chaplin gave these tips to help Millennials improve their credit:
1. Examine your credit report first
Chaplin suggests checking one’s credit report 90 days before starting the home buying process to ensure that your score is in a healthy range.
2. Start planning early
Because building credit may take some time, Chaplin suggests that future home buyers keep close track of their credit, and exactly how their spending affects it.
3. Build credit
Building credit is essential, and can be completed by paying your bills on time, maintaining a small credit utilization ratio and factoring existing payments such as student loans and rent into your report.
4. Set realistic goals
The more money put down on a home, they lower the monthly mortgage payment will be, however homebuyers should not plan to put down more than they can afford, according to Chaplin. Homebuyers should also make sure to factor closing costs into their budget.
5. Do your homework
Homebuyers should research rates on mortgages to see if the rate they are presented is competitive.
6. Keep an objective balance
Although building credit and preparing finances may take time, Chaplin said future homebuyers should have patience and be willing to delay home ownership, as opposed to give it up.
Nick & Cindy Davis work with several lenders who will assist you in getting your credit to where it needs to be if you want to purchase a home. We can be reached at 813-300-7116, or simply click here and we will be in touch shortly.