Take Control of Your Credit

Purchasing a home is a significant financial commitment. You may be ready to plant roots and purchase a home, but are you financially ready? Things like knowing your credit score, creating (and following) a budget, and making sure to save extra cash are small steps you can take to prepare for the financial challenges of homeownership. Even if you have debt or other financial challenges, the reality is that there are things you can do now to help reach your homeownership goal in the future.

  • Take a homebuyer seminar. Homebuyer seminars are a great way to learn about the financial steps involved in buying a home. For example, New Hampshire Housing’s online seminar helps you assess your budget to see if you can absorb the extra costs of homeownership. Even better news—many homebuyer seminars are available at a low cost or are free.
  • Contact a HUD-approved counseling agency. HUD-approved counseling agencies often offer financial fitness counseling and can help you create a strategy to pay down debts and set yourself up for success. You can find a list of them here.
  • Keep tabs on your credit. Under the Fair and Accurate Credit Transactions Act (FACTA), you are able to get one free credit report from each of the three credit reporting agencies (Experian, Equifax, and TransUnion) per year. You can contact the Annual Credit Report Request Service (www.annualcreditreport.com) to receive yours. Knowledge is power!
  • Build a budget—and stick to it. Creating a spending and savings plan helps you see how much money you’re taking in versus how much you’re spending on bills, food, and other expenses.  As a general rule of thumb, follow the spending guidelines below:
Category % of your net   budget spent on that category
Housing 20-30%
Utilities 4-7%
Food 15-20%
Transportation 6-20%
Medical 2-8%
Clothing 2-4%
Saving/Investing 5-10%
Debt Payment 15-20%
Misc. 5-10%
Net Income (Total) 100%

Budgeting can help you see where you could be saving more money. What you find might surprise you!

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