Helena Talbot’s blog – The Most Common Credit Myths Revealed

One of the most challenging things to grasp in the home buying process is your credit score and how it works. Many people “assume” they have good credit because they pay their bills on time etc. However, the credit bureaus do not look at credit like you and I do. So let’s talk about exactly what it is they do think and exactly what “they” consider “good” credit. Read on . . . you might be surprised!
Common Credit Myths

• You may think that if you have a lot of cash and you have a great income or that you have a good amount of equity in your home that your FICO score will not matter. In reality your credit score will determine whether or not you qualify for a loan and what your interest rate will be. There are a few exceptions to this: if you pay cash or if you put down a much larger than normal down payment

• You may think that if you do not have any debt and no late payments that you have good credit. This is the myth that shocks almost everyone because it doesn’t make much sense. The credit lenders look a credit differently. They consider financial responsibility and good credit two separate issues. Your FICO score is used to measure how you manage your debt. So if you have credit accounts they look to see if you use them regularly or if you abuse them

• Here is the tricky part of credit scoring that most people don’t understand. If you have no credit and no debt does not mean you have good credit. On the other hand, if you have credit and you are maxed out on many of your accounts or if you are constantly applying for credit; they consider this to be an indicator of credit abuse

• Believe it or not FICO will give you a top score if you keep your credit account balances at 30% of your credit limit and you make your payments on time

• When was the last time you checked your credit? If you are thinking about buying a home, now is the time to check your credit. This will allow you time to fix any inaccuracies so that there are no surprises when you apply for your loan.

Additionally, the higher you are able to get your credit score could quite possibly get you a lower interest rate and over 30 years that can really add up. FYI – make sure you check all three credit bureaus because each of them can have differing information

• Some people think that if they have had a foreclosure or a short sale that their credit report will be bad for seven to ten years. However, some of the items on your credit report like late mortgage payments, derogatory credit items, foreclosures and short sales will show up for seven to ten years, but your actual credit “score” can be fixed at least enough for you to buy another home. Of course, this depends on several factors such as how much cash you have to put down, what type of loan are you trying to get and if you had any extenuating circumstances that caused you to lose your first home

• You may think that a short sale has much less effect on your credit score than a foreclosure does. The fact is that short sales and foreclosures have the same negative impact on your credit score

Well there you have it. The most common credit myths revealed. If you are thinking about buying a home and you have credit issues that you are concerned about, contact your realtor to help you sort things out. Your realtor has quite a bit of experience in helping people just like you buy a home.

I specialize in helping buyers and sellers invest in real estate in Loudoun County and Northern Virginia.

I have over 25 years experience in the real estate industry.  As a Broker/Owner with Exit Realty Talbot and Company, I bring special tools and solutions that enable me to exceed the expectations of my clientele.  If you are considering listing your property in Loudoun County or the nearby areas, ask me about our latest internet marketing systems.  I would appreciate the opportunity to earn your business.  I am experienced in listing and selling short sales.  For information on the short sale process, please visit  www.LoudounShortSaleSolutions.com.

For a free market analysis on the value of your home, please visit http://www.LoudounHomeValues.com

My past awards and designations include – 2003 President of the Dulles Association of Realtors, 2003 Dulles Area Assoc Realtor of the Year, Salesperson of the year 2000 Dulles Area Assoc of Realtors,  Top Producer awards from both the Dulles Area Association and the Northern Virginia Association of Realtors.  I am a member of the Top 5 in Real Estate Network.

I have lived in Loudoun County since 1979.  I am married with two grown children and two grandchildren.  My son in law is my business partner in real estate.  I love to jog in the mornings and spend time relaxing on my Trawler during the summer months.

Loudoun County and Northern Virginia Real Estate Sales and Solutions – Helena Talbot, Broker. I specialize in helping buyers and sellers invest in real estate in the Northern Virginia area to include Loudoun County and surrounding areas including Fairfax, Clarke, Fauquier, Prince William  Counties.  Our local neighborhoods includeLeesburgAshburn, Sterling, Potomac Falls, Brambleton, Broadlands, Lansdowne, River Creek, Belmont Country Club, Beacon Hill, Shenstone, Waterford, Lovettsville, Purcellville, Hamilton, Round Hill and Bluemont.                        Cell 703.727.9885    Office 703.574.3800

Free iPhone/Android Mobile App to search Northern Virginia real estate.  2 easy ways to get the App:  Text “Exit9” to 87778 or enter http://87778.mobi/Exit9 into your browser.

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