How much time do you have to spend saving to buy a $200,000 house in cash? Probably your whole working life and sometimes that is not enough. The majority of people who receive salary have to distribute them in their obligatory payments while the savings are very little. Then the purchase of the house only has one way to make it a reality, through a mortgage or loan.
There are a number of factors to be awarded for that mortgage, including your employment history and your good credit score is one of the decisive factors too.
This little word is feared by many and also loved by many since it is what determines how much and for what money can be lent by a person, so that he can obtain certain goods or services and does not have to pay them immediately.
When you get approved for a credit, you can get cash or credit cards to use when you need a product to use and pay later, as it is the case of cars or a house. As you will see with the credit, you can achieve a dream like the one of being the owner of a house.
Like everything else, credit has a starting point. Usually there are department store cards for students, in which a small amount is offered as a credit limit. To the extent that you are paying on time, and showing greater ability to pay, you could receive increase in your line of credit.
Another way to start your credit is by using co-debtors, people who sign up for the loan. Many times this is not optional, but they put it as a condition to grant the credit. The disadvantage is that if you look bad, you not only affect your credit but that of the person signing as a co-debtor, and this makes it very difficult to get someone to give you such help.
Once you have your first account on credit, you officially start building your credit history. For that you must be of legal age, have valid identification of the place where you live and supply your social security number with which they will do the investigation before giving the credit.
Every time you apply for a new credit or have a change in your history, such as increase in credit line, or have closed accounts or salaries, all information automatically appears under your name.
You may not think about buying a house now, or you do not want to have a new car and prefer to save until you can buy a used one. It is ideal behavior that could be applauded by a financial planner.
But reality sometimes gives you unexpected things such as emergencies or need of a device or some other important thing. If you cannot cover these expenses with your earnings and savings, a good credit history will help you. I hope now you know why it is important to have a good credit and how to improve credit score.