You’ve finally decided that, yes, you can afford to buy a Santa Cruz home. After years of frugal saving, hard work and patient waiting, the timing is great. You don’t want to wait anymore, so you rush out and start looking for homes. It is, after all, a buyer’s market, and you’re a buyer.
Now, if you read about real estate, you’ve probably considered your credit. Is my credit strong enough? Is my score high enough? Some go to lenders and request preapproval. A few request prequalification. Many, however, go to the “free” credit score searches.
Of those who use the credit score searches, some find a Santa Cruz home they want to buy. They then confidently take their credit reports to the lenders and find out the lenders don’t care about the reports. Others find out that the “free” doesn’t really mean free.
Generally, these credit reporting services are helpful, but most aren’t free. You sign up to get your report and, in the fine print, you’re agreeing to enroll in services that require a monthly fee. The services you end up paying for can be somewhat helpful. But many people sign up not knowing what they’re getting into. If you want those types of monthly services, research the companies and don’t fall for scam sites, because they’re out there.
Why won’t leaders use the credit reports you take to them?
They can’t use the credit scores you bring to them. In fact, they’re required to request credit scores on their own. And, the credit reports lenders get may not reflect what you receive from the reporting services you hired.
Typically, lenders use the median FICO Scores from three credit bureaus: Equifax, Experian and TransUnion. Those FICO Scores may not be the same from bureau to bureau. Some of the “free” credit places provide these scores, but usually from only one bureau rather than all three.
So what should you do?
Talk to the lender. Get preapproved, not prequalified. Not only will you find out how good your credit really is, but you’ll also be more attractive to sellers. And, preapproval tells you exactly how much you can reasonably afford to spend on your new Santa Cruz home.
If you’re looking for a beautiful home to call your own, I can help. Call me at 831.662.6522 or email me at Lauren@LaurenSpencer.com for more information.