Skip to main content

Credit: Who Needs It? Why is it Important? How do you Establish it?

Credit:  Who Needs It?  
Why is it Important?  
How do you Establish it?

     I've been receiving more and more inquiries from young potential Home Buyers as of late.  That's reason for celebration, as I believe now is a great time to enter the housing market.  With home prices affordable and interest rates still low, there's truly a good opportunity for young Home Buyers.

     But with the growing number of young Buyers, I'm also seeing a larger number of hopeful clients with what is deemed as  insufficient credit "histories".  That can mean several things, but typically the result is lower credit scores or no credit scores for these hopeful clients.  

     I also see this issue arise with individuals coming out of Bankruptcy, or for those that always pay cash for their purchases.

     The bottom line is, if there are no open accounts of any kind for credit cards, installment loans, personal loans, or student loans, the  Credit Scoring System  has no way to judge their credit "worthiness".  They simply have no spending or payment history on which to base a credit score.

    So how do we proceed with a potential Home Buyer, should this be the case?

     Establishing credit is not a difficult process.  In this day and age, credit is also vitally important, as credit runs our lives ... or at minimum, affects it greatly.  Below are a few tips and clues I supply my hopeful Home Buyers when they wish to establish credit and a credit history:

     *  Open up a credit card (known as revolving debt) with a modest borrowing limit.  Major retailers and gasoline companies are two good examples of this type of debt.

     *  Use the newly-established credit card by charging purchases within your budget constraints.  Pay the balance on time and in full each month.

       Note:  I recommend that first-time credit users open only one or two credit lines to begin with.  Take small steps.  Learn to handle your credit wisely.  Crawl before you walk.

     If you do not pay off the balance in full each month, keep your credit card balance(s) below 50% of the credit limit.  (This is better for your credit.  Likewise, balances kept below 30% and 10% of the limit, raise the scores even more.)

     *  Never close out old accounts, should you have them.  Keep them open, even if you do not plan on using them.  Remember, the longer you have had a credit profile or the longer the credit history, the better the scoring impact will be. 

     Consider using a  co-signer  to establish a credit account.  Lenders consider the co-signer's credit as existing credit.  (Note:  Co-signing is not without risk, so consider this action carefully.)  

     *  Always make sure prior to taking out new credit or initiating a new credit card, that the company utilized reports to the  Credit Bureaus.

     Should you be someone that suffered through a Bankruptcy or Foreclosure ... or had other credit issues, you might have been turned down for credit or credit cards.  In those cases, try opening a "secured" account with a credit union or credit card company.  A  "secured" account"  is one where you deposit cash ($250, $500, $1,000) with the credit company, as collateral for a credit card.  

     Use the card as you would any other ... paying it off in its entirety each month.  This creates a "timely payment history" and lays the groundwork to build credit scores.
     If in doubt as to how to proceed in establishing or restoring your credit,  contact me  prior to taking action. 

     As always, whether just beginning your pursuit of good credit and credit scores or as part of your ongoing efforts, monitor your credit and credit scores, either by visiting to receive your one FREE credit report per year (they report credit, but not credit scores) ... 

     Or again, contact me.  We'll work together to establish ... repair and improve ... and monitor your credit safely and wisely.

     *  Hoping to establish good credit?  Dreaming of Buying a Home in  Will County  or elsewhere in ChicagolandContact me today!  I'll put my 37 years of mortgage experience and expertise to work on your behalf.

     I can be conveniently found at: 
Direct:  815.524.2280
Cell:  708.921.6331
eFax:  815.524.2281

Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender  
 Trulia Acct. of Gene Mundt, Mortgage Lender   Zillow Acct. of Gene Mundt, Mortgage Lender Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender 
Gene Mundt, Mortgage Lender, a Lender with 37 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL.  

Your Referrals are Greatly Appreciated!



Popular posts from this blog

Property Addresses: Gettin' Down to the Nitty Gritty

Property Addresses:   Gettin' Down to the Nitty Gritty

Take just a second and read through the following statements ...

“The devil is in the details” 
... "in life, it is often the tiny details that end up 
being the most important"

"Get Down To The Nitty Gritty"

“Little details have special talents in 
creating big problems!” 

“Sweat the details”

"Success is the sum of details"

Details ...Details ... it's all about the details ...
     And I'll admit it, I'm a bit of a nerd about them.  My whole family is.  Details, the intricacies, the little things ... they matter to us.
When I was growing up, a typical conversation (and argument) between my brothers and myself at the dinner table or in the backyard centered around "details".  It didn't matter what the topic was, it was the minor differences ... the details about the topic ... that we argued about.  I'm sure we drove our parents crazy.  
Sports statistics and games ... minutiae rega…

Ready for Fall? It's Arriving Soon

Ready for Fall?  It's Arriving Soon

Friend ...

Maybe it's because football season has started. Maybe it's the kids being back in school. Or because the night air is cooler. But a sense of Fall has arrived here in Chicagoland ...

The Fall Season brings changes with it. Changes in temperatures. Changes to the clothing we wear. Our focus seems to shift with the coming of shorter days, falling leaves, and crisp air.

Fall can be the perfect time to do a multitude of things. You can prep your home for the upcoming winter weather ... or for Fall listing and sale. 

But whether you're moving on or staying put, Fall is a great time to declutter and organize your home inside and out ... and your finances too.

I've googled like crazy to find interesting articles filled with Fall info, ideas, tips, and photos. Articles that will help you usher the Fall Season in at your house. I hope you enjoy reading the articles offered below and that they inspire you to make any needed changes.


Paper or Paperless billing? Which serves YOUR needs best?

Paper or Paperless billing?  Which serves YOUR needs best?

These days, companies are under pressure to go "green" and become more environmentally friendly.  As a result, an increasing number of businesses are offering their customers a paperless option with which to receive and pay their bills. 

There are obviously many positives to be found within these paperless services:

Trees are saved  Reduced postage costs  Less paper documentation to organize or save/storePossible rewards for switching to paperlessPayments can often be made/posted same-dayAutomated payments can be set-upMore
But I can tell you from my vantage point as a Chicagoland/IL/WI Mortgage Originator, there are also negatives to be found within paperless methods.  For some of my mortgage clients, the choice of going "paperless" just hasn't worked well.

 For some, an email or text reminder regarding payment of bills has not been enough. They NEED a paper billing to arrive in their mail. 

Their paper bil…