3 Ways to Prepare Your Credit for Buying a House

Credit Score for Mortgage
Buying a house is a big milestone that you likely have spent months and years saving and planning for. While it’s easy to get caught up in saving for the down payment and scouting out the perfect neighborhood, you should also make sure that your credit is in order before applying for a mortgage.

If your credit score is low, you could potentially find your application for a mortgage turned down and you lose your dream home to another buyer. Even if you qualify for a mortgage, if you have less than ideal credit you may find yourself paying a high interest rate.

Here are three things you should do to get ready to apply for a mortgage:

·         Reduce Your Credit Utilization Percentage – Your credit utilization percentage is the amount of available credit compared to the amount of credit you are currently using. This accounts for 30 percent of your FICO score. To reduce your credit utilization percentage consider paying off your debt or increase your credit limits.
·         Have multiple credit or loan accounts – Mortgage lenders want to see that you regularly pay your bills on time and have successfully managed multiple accounts. If you only have one credit card, you may want to get an additional card to establish a deeper credit history. However, make sure you apply for the new card well in advance of your mortgage to give your credit score time to recover from the slight drop that occurs after opening a new account.
·         Review your credit report for errors –Keep an eye out for errors on your credit report which could lower your credit score, especially incorrect credit limits and erroneous accounts, recommends U.S. News & World Report. Obtain copies of your credit report from all three credit reporting agencies and verify that all information is correct. You should dispute any incorrect statements on your credit report, so the mortgage company makes their decision based on accurate and timely information.

Buying a home is a big investment, and you want to make sure that you get the best mortgage terms possible. The time and effort you put into getting your credit score and report in shape before applying for a mortgage can make the mortgage process smoother and lower your interest rate at the same time. 

Can Your Credit Score Keep You from Landing Your Dream Job?

Can Your Credit Score Keep You from Landing Your Dream Job?
You’ve made a few mistakes in the past with your credit. Maybe you have a high balance on one of your credit cards and make only the minimum payment every month. Or perhaps you paid a few credit card bills late last year. Now you have an interview for a fantastic new job, but you have a nagging feeling that your credit score could keep you from getting the job offer.

Will you be asked to undergo a credit or financial background check?

Sometimes the worry is totally unfounded, because not all jobs require employees to agree to a credit or financial background check. According to the U.S. Equal Employment Opportunity Commission, employers must ask for your permission before conducting a background check.

The 2016 National Financial Educators Council survey found that 26.3 percent of respondents reported that an employer or potential employer conducted a credit or financial background check. This means that the majority of potential hires are not asked to undergo a credit check. Additionally, if you live in one of the 11 states where employment credit checks are prohibited, an employer legally cannot conduct a financial background check as part of the pre-employment process.

What are employers looking for?

If you are worried about your credit score being on the low side, you do not need to be concerned. Employers do not receive the three digit number, but instead see the actual credit report, says Nerd Wallet. According to Monster.com, when your employer reviews your report, they will see a list of any loans you have outstanding, mortgages and all of your credit card accounts, as well as their balances. Your report also includes any late payments, bankruptcies, judgments and liens.

Many companies use the credit history to gauge your overall trustworthiness and level of responsibility. However, some companies use the information for positions that have control over finances—operating under the assumption that people in financial trouble might be more tempted to steal funds from the company.

What happens if the employer does not like what they see in the credit report?

Yes, it is possible you could lose a job offer or promotion due to information in your credit report. According to a recent National Financial Educators Council survey, about 4 percent of people surveyed stated that they had been turned down for a job or promotion due to their credit or financial background.

However, if you do lose a job or promotion due to your credit history, you won’t be left wondering if that was the reason. The FTC advises employers that before they turn down an applicant due to information in a consumer report, which includes credit information as well as criminal history, the company must notify the applicant of the information and provide them with a copy. This gives the person the opportunity to confirm that the information is accurate.

There are many reasons to keep your credit in good shape. If you practice good financial management and pay your bills on time, your credit report could be one less thing to worry about when applying for a job.

Your Identity Has Been Stolen: What to Do First

What to Do First After Identity Fraud

It can be an overwhelming feeling when you find out your identity has been stolen. You fear the worst, but don’t know where to start. There may be a lot of work to be done to clean it up, but the first things you should do are take steps to stop new fraud from occurring. 

Here are five things you should do immediately after you discover you have been a victim of identity theft:

1.     Put a Fraud Alert on your credit reports. According to FTC Guide Taking Charge: What to Do if Your Identit­­y is Stolen, the very first thing you need to do is get a fraud alert placed on your credit report. This lasts for 90 days and will require banks or companies to contact you personally before opening new accounts or credit. You must call one of the three credit bureaus to report the crime, and that bureau is responsible for alerting the other agencies.
2.     Report the theft to the Federal Trade Commission. You can report the crime to the FTC through an online form. During the reporting process, the FTC will help you create a customized recovery plan. You will also be given an ID theft affidavit.  
3.     File a report with your local police. According to USA.gov, you may need a police report, as well as the FTC report, to report the fraud to any financial institutions where you have an account. Bring your FTC ID theft affidavit with you to file the report. Although the police may not solve the case, it is still important to create a record of the crime to potentially help local authorities become aware of any larger problems in the area.
4.     Request your credit report and review for errors. You are entitled to a free credit report after an identity theft. Request your credit report from all three credit bureaus and carefully review the reports for any new accounts or lines of credit that you did not open. US News & World Report recommends checking any accounts that are dormant or that you are not currently using for new charges.
5.     Contact the banks and companies where the thief opened accounts. If you find fraudulent activity, immediately contact the company and request the account(s) be locked or closed.

Time is important when it comes to identity theft. Prioritize these five steps to help prevent any additional fraudulent accounts being opened. By quickly taking action to contain the damage, you can then begin the process of removing any blemishes from the crime from your credit history.