NBSB Offers Tips to Boost your Credit Score & Save for a Down Payment!

In recognition of June as American Housing Month, North Brookfield Savings Bank is reminding customers of the importance of their credit score when looking for a home.

“Whether you’re renting or buying, your credit score is significant,” said SVP / Director of Mortgage Lending and Business Development, Frank Amato. “It is important for you to responsibly manage your debt levels and maintain good credit reports so that you are more attractive to leasing agents and mortgage lenders.”

North Brookfield suggests the following tips to improve your credit score:

1. Request a copy of your credit score report – and make sure it is correct. Your credit report illustrates your credit performance, and it needs to be accurate so that you can apply for other loans – such as a mortgage. Everyone is entitled to receive a free copy of his or her credit report annually from each of the three credit reporting agencies, but you must go through the Federal Trade Commission’s website at annualcreditreport.com, or call 1-877-322-8228. Note that you may have to pay for the numerical credit score itself.
2. Set up automatic bill Payment history makes up 32 percent of your Vantage Score credit score and 35 percent of your FICO credit score. The longer you pay your bills on time, the better your score. Avoid missed payments by setting as many of your bills to automatic pay as possible.
3. Build credit through renting. Vantage Score’s scoring model, created by the three major credit bureaus, will now weigh rent and utility payment records. This will allow it to score as many as 35 million people (about twice the population of New York) who previously could not get a credit score.
4. Keep balances low on credit cards and ‘revolving credit.’ Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. You often can increase your scores by limiting your charges to 30 percent or less of a card’s limit.
5. Apply for and open new credit accounts only as needed. Keep this in mind the next time a retailer offers you 10 percent off if you open an account. However, if you need a new line of credit, do not jump at the first appealing offer; compare rates and fees offered through mail solicitation, on the Internet or at your local bank.
6. Do not close old, paid off accounts. According to FICO, closing accounts can never help your score and can in fact damage it.
7. Talk to credit counselors if you are in trouble. Using legitimate, non-profit credit counseling can help you manage your debt and will not hurt your credit score. For more information on debt management, contact the National Foundation for Consumer Credit (nfcc.org).

Now that you have worked hard to raise your credit score, it is time to start saving for a down payment.When considering buying a home, the down payment you put upfront plays a significant role in your future housing expenses. According to the Consumer Financial Protection Bureau, the amount you save can influence your interest rate, monthly housing payment and your need for mortgage insurance. As you prepare for the home buying process, North Brookfield Savings Bank is highlighting six tips to help you cut the extra costs and save a substantial amount for your down payment.

“Typically, lenders require anywhere between 3 and 20 percent of a home’s purchase value as down payment. By consulting a mortgage professional, they can help determine what makes the most sense for you” said VP / Director of Mortgage Lending and Business Development, Frank Amato. “By responsibly managing your spending and allocating extra cash to a savings account, you will be on the right track towards saving for your home purchase.”

North Brookfield Savings Bank is providing prospective homebuyers with these tips to save for a down payment:

• Develop a budget & timeline.Start by determining how much you will need for a down payment. Create a budget and calculate how much you can realistically save each month – that will help you gauge when you will be ready to transition from renter to homeowner.
• Establish a separate savings account.Set up a separate savings account exclusively for your down payment and make your monthly contributions automatic. By keeping this money separate, you will be less likely to tap into it when you are tight on cash.
• Shop around to reduce major monthly expenses. It is a promising idea to check rates for your car insurance, renter’s insurance, health insurance, cable, Internet, or cell phone plan. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts.
• Monitor your spending.With online banking, keeping an eye on your spending is easier than ever. Track where most of your discretionary income is going. Identify areas where you could cut back (e.g., nice meals out, vacations, etc.) and instead put that money into savings.
• Look into state and local home-buying programs.Many states, counties and local governments operate programs for first-time homebuyers. Some programs offer housing discounts, while others provide down payment loans or grants.
• Celebrate savings milestones.Saving enough for a down payment can be daunting. To avoid getting discouraged, break it up into smaller goals and reward yourself when you reach each one. If you need to save $30,000 total, consider treating yourself to a nice meal every $5,000 saved. This will help you stay motivated throughout the process.

For those of you looking to buy a home, these tips will get you on your way! Boosting your credit and saving for a down payment prepare you for starting the home-buying process.