About 2 weeks ago my wife and I closed on the sale of the house we had lived in for the past 7 years. We loved our old house, but we knew it was time to do a slight upgrade since the rates were starting to go up, and we had an opportunity for my in-laws to build us a custom home on a beautiful tree lined lot, in a neighborhood we loved. We would also now have a yard, which was something we didn't really have at our old house. So this summer we built that new house and then closed on it the same day as we sold our old house.
When we started the process of trying to find a new home loan with which to buy the new house, we realized that we would want to make sure that we stayed on top of our credit situation, that we only did things to maximize our credit score, and that we got the best rate possible on the house. For the most part we were able to do that, and we got the lowest possible rate at the time because our excellent credit scores put us in the highest tier for the best rates.
Now that we've closed on the house, and we don't anticipate using any further credit anytime in the near future, should we even care about or keep track of our credit scores?
Maintaining And Improving Our Credit In Preparation For A Home Loan
Checking our credit scores on a regular basis was something we did through the spring and summer this year as we prepared to buy a new house. Some of the places that we checked our credit scores and got our credit reports include:
- Credit Karma: They will give you your TransUnion credit score for free, along with a suite of other credit tools.
- Credit Sesame: They will give you an Experian credit score for free, along with a bunch of other financial, credit and loan tools.
- Quizzle: They'll give you an Experian credit score, along with your full credit report for free!
- Equifax: Get your Equifax score for free by signing up for a free 30 day trial. Don't forget you'll need to cancel.
- MyFICO: Get your actual FICO credit score and credit report with a free trial. Just don't forget to cancel! I almost did!
- AnnualCreditReport.com: Get your credit report annually for free from each of the big three credit reporting agencies. If you want to, you can pay a little bit and get your FICO score as well. (Or just do a free trial at MyFICO to get it for free)
We stayed on top of our credit by doing the things they say to do in order to improve your credit scores. We did things like making sure our payments got in on time, we didn't sign up for a bunch of new cards, we maintained existing aged accounts, we didn't over-utilize our credit and we used and paid off several different types of credit.
Home Loan Closed, Best Rate Received
Our hard work over the years means we both had great credit scores, and we knew we would most likely be approved for a loan, in the best rate tier.
We ended up finding and working with a mortgage company that ended up giving us the lowest rate possible at the time, 3.875%. Our credit scores showed we were responsible with credit and were a good risk for them to take – without adding any points to our rate.
Now That We've Closed On Our House, Should We Even Care About Our Credit?
We've now closed on that loan, and we got the best rate available. Since we won't need to take out any new loans or credit in the foreseeable future, should we even care about or focus on our credit anymore? Does it even make a difference if we aren't going to need a good credit score for anything?
I don't think we'll be as hyper vigilant about our credit now, but that isn't to say that we won't continue our responsible use of credit.
Things A Good Credit Score Can Help With
Here are some reasons you may want to stay on top of your credit:
- Good credit can help get better insurance rates: You can sometimes get lower homeowners and auto insurance rates if you have good credit.
- Good credit help you get a job: Sometimes employers will check an applicant's credit to get an indication that they're reliable and responsible.
- Good credit help you when signing up for new accounts: Some utilities may waive hefty deposits or lower rates if you have good credit, or cell phone companies may offer a better plan.
- Good credit will help you if you need to move: If you need to move to a new house, or end up renting, having good credit will help you to get a loan, or to be approved as a renter.
What are your thoughts? Do you care about your credit score, and do you take steps to ensure that your credit stays good, or that it improves?