Wilkinson Era Real Estate

A Beginner’s Guide to Credit Scores

by Mundy Bringuier 08/04/2019

Your credit score can be a vast unknown when you are starting out in life. When you are just beginning you may not know what factors the financial world considers to calculate your creditworthiness. At this point, you are what the credit reporting agencies call credit invisible. To create a credit score, you will need to take your time and remain intentional. Websites like Nerdwallet.com and Annuity.org have information to build your credit score and financial health. Take your financial health seriously and be proactive about getting the information you need to create a stable future.

Annual Credit Reports 

A good starting point is to order your credit reports from all three reporting agencies. You get a free one from each of them every twelve months. An easy way to remember to check on your report yearly would be to order them on or near your birthday. If you find errors on any of the reports take the time to have the reporting agency, make corrections; then follow up. Next step in creating a credit score would be to open a secured credit card. This type of card is a credit card where the credit limit is equal to the amount of money you deposit. Your neighborhood bank or nearby credit union that you have your current accounts with can help you. 

Another way to build your credit is to take out a small credit builder loan. These credit-builder types of loans are designed to help you start developing a credit history. You can find them at credit unions and smaller community banks. When you take out this kind of loan, the money sits in an account, not accessible until paid in full. Make your payments on time and the financial institute reports those on-time payments to the credit reporting agencies. Once paid off the funds plus any interest is released to you. You now have the start of a credit score and perhaps a small emergency fund or start to a down payment.

Keep These in Mind

The essentials of building your credit score are:

- Making timely payments

- Keep your balance 30% or less of your available credit

- Monitor your credit reports

- Be patient

Time is your friend when you are just starting. By being patient and diligent, you will see a steady climb in your numbers. Like diet and exercise, financial health is only achieved by ongoing healthy habits. 

 If you have not ordered your credit reports in the last 12 months, order them this week and see where you stand.

About the Author
Author

Mundy Bringuier

 

When Buyers ask why I need a REALTOR®, here is my response....... with 19 years of experience. For one thing we have the experience, we know the pit-falls, and we know what to look out for when something doesn’t look right from experience.

A REALTOR® with experience is PRICELESS. A REALTOR® is well worth the money that you don’t pay. We can save you from losing money, there are many things that can go wrong (“Time is of the Essence”) in a contract, which means you make one mistake, miss a date on contract it can cause the contract to be terminated and can lose your Ernest Deposit Money which can be devastated to any buyer especially a first time home buyer.

A REALTOR® job is to protect you to the best of their ability, look out for your best interest, be loyal to you, provide you with all material facts that could influence your decision(s), follow your lawful instructions, keep confidential information confidential and to help you negotiate the best price.

Here are some things you may not be aware of: in just one purchase transaction:

  1. There are nearly 300 communications that takes place between, the seller(s), agents, attorney, lender, inspectors, insurance companies, surveyors, appraisers with emails, text, faxes and phone calls.
  2. Nearly 400 documents/pages, all of which have significant consequences if you don’t fully understand.
  3. Review of documents/Insure accuracy: Offer to Purchase and Contract, HOA documents (covenants & restrictions), Loan package, Addendums, Property Disclosure Statements, Attorney documents, Review the final financial statement (HUD-1) to insure you get every penny that is due you.
  4. Coordinate all events: starting making appointment to show properties, home and termite inspections, surveyors, appraisers, repairs to be done, closings. The list goes on of probable unforeseen things that may come and they do come up that needs to be handle to keep everything running smooth and to help prevent the contract from being terminated.
  5. If the purchase transaction doesn’t close it can be devastating to all parties involved in the transaction. There is consist communication with the lender and the attorney.

It is the REALTOR®’s job in represent the buyer to accomplish all of the above and to do what’s best for the buyer and it doesn’t cost the buyer one penny.

Bottom line.... Get a REALTOR® to represent you, I course I would hope you choose me but whether you choose me or another REALTOR®, get yourself a REALTOR®, after all purchasing a home is not something you do every day, twice a year or even once a year. We do, it’s all we do every day, all day.

As for New Construction:

A common misconception when purchasing new construction is that you don’t need a

REALTOR®. Ask any sales agent working for the builder and the answer you'll get (guaranteed) is that you don't need a REALTOR®, they can take care of everything. This may be true but it doesn't get you personal representation that all buyers should expect and have.

A good question to ask is, "Who will represent me?" Now the answers come down to, "We will...." Think about it, these representatives are employed by and responsible to the builder. Why would someone believe that the potential for a "conflict of interest" doesn't exist?

Case in point, "Do I need an inspection?" The answers provided by the builder is, no, we inspect and do several reviews of the property before you take ownership and you have a "full one year warranty" that covers w, x, y, & z.

Any REALTOR® representing you will tell you that you should have a personal structural inspection conducted even with new construction. Some of the issues identified with our new construction inspections include: missing roof tile, black mold in the attic, sealed vents, faulty smoke detectors, wiring violations, foundation, structure issues, etc. These are the types of problems that the normal home owner may not identify for years beyond the warranty. Now who benefits from being told that an inspection is not necessary?

When buying new construction, having a REALTOR® that represents you personally is a huge benefit from negotiations, asking important questions, monitoring the building process, etc.  The choice is yours, but wouldn't it make sense to protect yourself with personal representation?

Also make sure your REALTOR® accompanies you on EVERY first visit of new builder viewings, as the builders will not take kindly if you view their models without your agent and you may lose your agents representation if you decide to purchase from them.
Choose an experienced REALTOR® when working with new home builders, because every builder is different and each situation is unique, you want someone on your side guiding you step by step through the process and making sure the builder is doing their part in the transaction.

One last comment: It is a common misconception that not using a REALTOR® when buying new construction will save you money. Builders have their fee to the REALTOR® budgeted separately from the house price. So it’s not costing you in the price of the house.

When a buyer does not use a Buyer agent (REALTOR®), the builder pays their sale represented a higher commission, pockets the saving or throws it into their marketing budget.

So instead of asking yourself, “Why should I use a REALTOR®?” the real question is,

“Why wouldn’t you hire a REALTOR®?” At no cost to you, hiring an agent will save you

time today and money tomorrow.

The decision is yours, I'd be honored for the chance to help you. Please call or e-mail me for an appointment that's easy and convenient for you. Thanks for stopping by. I'm looking forward to hearing from you.

Mundy Bringuier, Broker/REALTOR®

PS: Hablo Espanol