Credit Report Articles

Housing market should motivate consumers to build up credit scores

A good credit report is key to securing the most favorable mortgage terms.

Homeowners have a variety of different factors to consider as they weigh whether to try to refinance their mortgage in the coming months, or even try to enter the housing market for the first time.

For example, only about two months remain for people to take advantage of a popular homebuyer tax credit. Prospective buyers must be in the process of a home purchase by April 30 and must close on that deal by June 30 in order to take advantage of the credit, which is not expected to be renewed by Congress at this time.

Another thing to watch for will be how the Federal Reserve proceeds with its plan to stop buying mortgage-backed securities later this spring. There is some speculation that this move, while long expected, could result in more pressure for interest rates to go up, which could also have a negative impact on housing sales figures in the short term.

The state of the overall economy will also heavily influence how many people refinance mortgages or try to buy new homes in the coming year.

With that in mind, a recent Rasmussen poll found that 25 percent of homeowners predict that their home's value will decrease in the next 12 months, while 21 percent expect to see their value go up. Another 51 percent said their home prices will remain about the same.

For the longer term, homeowners were somewhat more optimistic. The poll found that 52 percent expect their property values to go up in the next five years, while 15 percent said prices would continue to go down and 28 percent said housing prices would stay about the same.

The poll noted that those who consider themselves investors were especially optimistic about the potential for home values to increase in the next five years.

With millions of Americans underwater on their mortgages or in danger of owing more than their homes are now worth, it's especially important to be able to qualify for more favorable lending terms that could end up saving hundreds of dollars per month.

Given the many variables currently facing the housing market, it makes sense for those considering an investment or refinancing effort to try to get their credit scores into the best possible shape so they can qualify for low interest rates while they are still available.