Credit is tied to most big financial decisions you will make in your life. From things as little as opening up a store card at the mall to buying your first home, your credit score is going to play a factor.

When it comes to mortgages, lenders take your credit score, particularly your FICO score, into consideration in determining the interest rate that you will likely be stuck with for years.

How is your credit score determined and what can you do to use it to get a better rate on your mortgage? We’ll cover all of that and more in this article.

Deciphering credit scores

Most major lenders assign your credit score based on the information provided by three national credit bureaus: Equifax, Experian, and TransUnion. These companies report your credit history to FICO, who give you a score from 300 to 850 (850 being the best your score can get).

When applying for a mortgage (or attempting to be pre-approved for a home loan), the lender you choose will weight several aspects to determine if they will lend money to you and under what terms they will lend you the money. Among these are your employment status, current salary, your savings and assets, and your credit score.

Lenders use this data to attempt to determine how likely you are to pay off your debt. To be considered a “safe” person to lend money to it will require a combination of things, including good credit.

What is good credit? Credit scores are based on five components:

  • 35%: your payment history
  • 30%: your debt amount
  • 15%: length of your credit history
  • 10%: types of credit you have used
  • 10%: recent credit inquiries (such as taking out new loans or opening new credit cards)

As you can see, paying your bills and loans on time each month is the key factor in determining your credit score. Also important, however, is keeping your total amount of debt low.

Most aspects of your credit score are in your control. Only 10% of your score is determined by the length of your credit history (i.e., when you opened your first card or took out your first loan).

To build your credit score, you’ll need to focus on lowering your balances, making on-time payments, and giving yourself time to diversify your credit.

What does this mean for taking out mortgages?

A higher credit score will get you a lower interest rate. By the time you pay off your mortgage, just a hundred points on your credit score could save you thousands on your mortgage, and that’s not including the money you might save by getting lower interest rates on other loans as well.

If you would like to buy a home within the next few years, take this time to focus on building your credit score:

  • If you have high balances, do your best to lower them
  • If you have a tendency to miss payments, set recurring reminders in your phone to make sure you pay on time
  • If you don’t have diverse credit, it could be a good time to take out a loan or open your first credit card

When it comes time to apply for a mortgage, you’ll thank yourself for focusing more on your credit score.

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There are many benefits to installing a security system in your home. It gives you a sense security and safety for you and your family. You’ll be able to be away from your home for both short and long periods with a peace of mind. The one choice you’ll need to make is the type of security system that you want to be installed in your home. Some alarms are manned by commandoes while others have much more simplistic designs.   

While some systems are installed by a professional, others are easier to install and can be done with a DIY approach. Remember that you can always start small and install a more complicated system as time goes on. You don’t even need to know how to use a drill or have any kind of technical expertise for most DIY install security systems. Below, you’ll find the basic steps that you should know before you install a home security system.

Basic Components In Your Home Security Package

  • The main panel complete with keypad
  • Sensors
  • Motion detectors

These are the basic things that will come with every home security system no matter how simple or fancy you get in your alarm system selection. The number of sensors that you need will depend on the number of doors and windows that are in your home. It also is based on your own personal preference. Remember that these sensors will be activated every time a door or window is opened when they are installed in your home. 

 

Install The Security Panel

Security panels are often wireless and should be placed near a power source to plug the panel in. These should also have a backup battery of some sorts. You can either place a nail on the wall or put an adhesive on the back of the panel. It’s really that simple to put the panel up!

Install The Sensors In Your Home

Security systems will come with door and window sensors and possibly along with some motion detectors. They will be placed with a moveable adhesive for your convenience. Every security system will come along with instructions for the optimum locations to place these sensors in. 

Test Your System

Once you have completed the above steps, you’ll need to test your system to ensure that it has been properly activated and that everything is working properly. The specific system that you’re installing should also come along with some instructions for testing purposes. 

While DIY home security systems seem fairly simple, they aren’t for everyone. Some homeowners prefer more complex systems to suit their needs. If a professional installation is for you, you should avoid self-install security systems altogether.    

 

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