For many buyers, only one thing stands in the way of purchasing the land of their dreams: their credit score. Your credit score is the numbers that reflect your financial history that lenders rely on when making an approval decision. These scores help them to predict whether you are a risk to their bank or institution as a borrower. The higher your credit score, the better your chances are of obtaining a land loan. That’s why Land Resellers would like to provide you with the following ways to improve your credit score to buy land.
Where Your Credit Score Comes From
The three major credit bureaus Experian, Equifax, and TransUnion receive your financial information from the Fair Isaac Corporation. Each of these credit bureaus calculates a “FICO” score based on a wide variety of factors that include your payment history, debts, loans, and how long you’ve had them.
A credit score can range from 300 to 850. While a score of 680 would be considered fair, a score of 720 or higher is considered excellent. Anything below 620 is considered poor credit. If you are a potential buyer, you may have some difficulty obtaining a land loan without an excellent credit score. Even if you do obtain one with a lower credit score, your land loan will probably cost you more in higher interest rates, penalties, and fees.
The takeaway? Maintaining a high credit score by paying your bills on time and keeping loan balances as low as possible will put you in a better position to purchase land.
Ways To Improve Your Credit Score
As a potential buyer, it’s important to understand what your credit score is and what’s contained in your report. All three of the major credit bureaus offer a free annual credit report. All you have to do is visit their website and request a copy to review your information. Aside from what debts you owe, a personal credit report contains a wealth of information that potential lenders look at. These include your payment history and any past credit inquiries you may have had.
Ways to improve your credit score include:
Paying Your Bills On Time
Your credit report will show the time and dates when your bills became past due. That’s why it’s essential to pay your bills on time every month without being late. While you can’t make late payments go away, you can establish a good history of timely payments going forward.
Keeping All Credit Balances As Low As Possible
A good rule of thumb for maintaining a good credit score is to keep open credit balances as low as possible or at least 50% of your credit limit. You should also try to avoid opening any new credit accounts unless absolutely necessary. While credit card companies may send you enticing offers, it’s important to weigh whether it’s worth it impacting your overall credit score.
Opening New Accounts Responsibly
If you’ve been working to improve your credit score, it’s important to open any new accounts responsibly. When you do, it’s essential to make all your payments on time. While shopping around for the best lender to obtain a land loan won’t have a negative impact on your score, applying for different credit cards in a short time frame will.
Paying Off Debt
While paying off any outstanding debts is a smart move, it won’t necessarily improve your credit score. However, it can influence a potential lender to look beyond your score to your credit history. The best way to avoid a low credit score is to prevent any new derogatory information from showing up on your credit report. You can achieve this by eliminating all your debts and making all future payments on time, without exception.
Land Resellers
Improving your credit score doesn’t have to be complicated. It just takes a little time and research and a good understanding of what it takes to maintain it. At Land Resellers, we help potential buyers find the property of their dreams in different parts of the country that match your unique criteria and budget. With detail-rich listings, you can view important information like land type, location, acreage, price, and other specifications. Check us out today to search for the most beautiful raw and undeveloped land, sprawling ranches, and custom home sites in the nation.