Prior to getting married or choosing a partner, most people won’t run a credit check. After all, when you love someone, their financial situation really shouldn’t matter. But, when the time comes for you to purchase a home together, his or her credit score could potentially make or break the deal.
So, if there are issues with credit, how can you still move forward with buying the home of your dreams, while at the same time alleviating the after-effects of your other half’s past financial history?
The good news is that there are ways that you can work around this situation – starting with ensuring that the low score is a true reflection of your spouse or partner’s actual credit history. For example, it is actually quite common for credit reports to contain errors – and oftentimes, these wrongly added details can be a factor in lowering an individual’s credit score.
With that in mind, be sure that you read over their credit report, line by line, making certain that all information in it is correct. If it isn’t, there are ways that you can contact the reporting credit bureau and informing them of the error, and requesting that this data be removed.
If it turns out that the information in the credit report is in fact correct, you can still proceed with your house-purchasing endeavor, albeit with a different strategy. Here, for instance, you could go the route of lowering the credit utilization rate. This means that rather than having your partner put all of his or her bill payment towards only the higher-interest components, they should instead pay down all of their balances to 30% or less of their maximum credit limit. This, in turn, can have the effect of raising their overall credit score more quickly.
Are you in the process of looking for a home, but aren’t sure where to begin? Working with a realtor can be the initial step to a successful new home transaction. Give us a call, and we will help to point you in the right direction.