Shopping around for a new home is an exciting and daunting time. As you comb through listings and compare amenities, you may be wondering about the differences between condos and houses. Condos offer a middle ground between houses and apartments that presents a range of modern conveniences. Single-family, detached homes — the traditional choice for many — come with their own benefits and drawbacks. Beyond the fact that you’ll owe a mortgage in either situation, condos do not share much in common with single-family houses. Let’s take a look at what sets condos apart from houses — and what factors you should consider as you take the plunge into homeownership.

Cost

Typically, the cost is cheaper for buying a condo versus buying a house — although the prices can vary widely depending upon the market and the area where you’re looking to buy. Make sure you also factor in the monthly or quarterly condo association fees — and what services they cover. When you own a house, you will likely pay for water, trash, and sewer services separately. Remember that a condo fee might cover those services.

Features

The upkeep of a house’s interior can be more demanding. You may have to invest additional funds in remodeling certain rooms to suit your lifestyle. A condo comes equipped with modern, luxury features and floor plans. However, you’ll lack the space and freedom to grow that a house offers — and if you decide those tile countertops aren’t your style, you can’t do anything about it, per condo association rules.

Land

Because you pay dues to a condo association, a condo relieves you of the obligation to do yard work, remove snow or mow your lawn, or foot the bill for maintenance repairs. A major expense for a repair would be shared equally among all owners of a condo. An owner of a single-family detached house might have to spend hours each week maintaining the outside appearance of the house and lawn.

Location and Amenities

Condos are typically located in urban and suburban areas, often within walking distance of restaurants, shopping, and cultural activities. Some condos, especially those located within a large condo neighborhood, will offer access to amenities such as swimming pools, gyms, and shared outdoor space. Houses, on the other hand, will offer far fewer amenities but provide more room for self-expression. You will be able to add a pool or tend a garden to your heart’s content — without incurring the wrath of the condo association. You may also need to drive further to access certain establishments, depending on your location.

Neighborhood

Regardless of which option you choose, you will be interacting with neighbors — so consider whether you prefer a little distance from your closest cohabitants, or would enjoy a lot of social encounters. A single-family home offers some space and privacy from the next closest neighbor. A condo, conversely, packs you in with a slew of other condo dwellers, similar to an apartment situation. You’re more likely to run into your fellow condo neighbors, who might share common interests — as certain condo neighborhoods tend to attract similar demographics, such as young professionals or older, retired couples.

Additional Fees

A monthly condo association fee, when added on top of a mortgage payment, can be a major drawback for condos. You might also be stuck ponying up more than your share of the condo fees if some of your neighbors don’t pay up. Single-family houses come with their own set of additional costs, such as unexpected repairs — which you may have difficulty budgeting for in advance.

Restrictions

If you chafe at the thought of someone else dictating what kind of flowers you can display on your front porch, whether you can grill outside, or the type of pets you can have, steer clear of condos. Some condo associations impose very strict guidelines for their residents. When you purchase a single-family dwelling, you’ll have to abide by town or city ordinances or codes — but the requirements will be much more relaxed.

Selling

When the time comes to put your property on the market, you might find the house to be easier to sell than a condo. Here’s why: Because all condos in a neighborhood are the same as the others, there won’t be anything to differentiate yours from the rest. And if a nearby resident sells an identical unit, that could negatively affect the value of your own unit.

Bottom Line

As you prepare to choose between buying a condo versus buying a house, make sure your credit report is in stellar shape for those mortgage applications. We can help you address any lingering credit issues and snag you a higher credit score. Get started with a free consultation at Ovation Credit.

Having a strong credit score opens the door to many benefits — including the ability to qualify for a car loan at reasonable interest rates. While you can apply for an auto loan regardless of your score, your approval odds are much more limited when your score isn’t up to par — and you stand to pay much more in interest even if the lender does accept your application. That means you’re facing a much higher monthly payment, and possibly a longer repayment period. Here’s what you need to know as you’re considering your credit auto loan options.

The Credit Score Auto Lenders Use

Your credit score can vary depending on the particular scoring model used by the credit bureau that calculates it. While each of your three scores may vary by several points, the difference is likely not that significant. You may be wondering which score the auto lender will pull when evaluating your loan application. Unfortunately, there is no way to predict this, as it could be any one of the scoring models. Or it could be a model specific to auto lenders. These “auto scores” tend to weigh different factors than a consumer credit score, and they’re mainly used to predict the likelihood of potential auto loan default. Red flags for an auto credit scoring model might include recent bankruptcy, signs of impending bankruptcy, previous late payments on an auto payment, or previous repossessions or collections from an auto loan.

Credit Score Ranges: Why They’re Important to Auto Lenders

The credit bureaus may categorize your credit score as belonging to a certain range. Experian, for example, classifies buyers in certain credit score ranges from the “deep subprime” level of 300–500, all the way up to a super-prime category for 781–850 scores. Most American consumers fall squarely in the 661–780 “prime” bracket. A super-prime consumer would likely have no trouble obtaining an auto loan at the lowest interest rate offered — and spend much less on their auto loan financing than the groups below them. In fact, according to Experian Automotive, in 2017 the average interest rate for the deep subprime buyers was 13.98%, while the top-rung buyers scored an average interest rate of 2.84%.

The Loan Amount and Your Credit Score

When interest is draining so much of your monthly payment, you take much longer to pay off the actual principal (also known as the base amount due on the loan). Because the balance will take much longer to drop, you’ll likely end up owing more on the car than its value, due to the car’s rapid depreciation. On the other hand, having a loan with lower rates will enable you to pay down the principal much faster. You might not be able to keep up with the car’s depreciating value, but you stand a much better chance with a lower interest rate.

The Financing Process

It’s important to shop around for rates from different lenders — and if you can, make it a priority to get pre-approved with a lender before you even fall in love with your dream car. That way, you have a much better idea of the status of your score and the types of rates that are available to you, given your credit score. You may find a much better financing deal with your local bank or credit union than you would through a dealership. For those with higher credit scores, shopping around for rates isn’t as crucial — and the dealership will be able to submit your application to several different lenders to find you the best rate.

Get Help

You can walk into your local dealership to discuss your credit auto loan options at any time. The marketplace is teeming with lenders that work with applicants with lower credit scores, and it is fairly easy to qualify for an auto loan. But if you have an inkling that your credit score might not be in optimal shape, it’s a great idea to work on boosting your credit score so you can lock in the best possible rates. After all, that’ll ultimately save you the most money over the lifetime of the loan. Plan on taking at least six months to work toward boosting your credit score before you start submitting credit auto loan applications.

Luckily, we can help. When you partner with our credit-savvy pros at Ovation Credit, we’ll repair your credit and give you the boost you need to qualify for that auto loan. Contact us for a free consultation today.

If you carry balances month to month on your credit cards, you could be unknowingly weakening your credit score. Credit utilization, or the measure of the amount of credit you owe compared to your overall credit limit, can signal one of two things — either that you are a responsible borrower likely to meet your payment obligations, or that you are dangerously overextended with an excessive credit card and loan balances. To calculate your credit utilization, divide your credit card balance by your credit limit and multiply by 100. Experts generally advise keeping your credit utilization at 30 percent or less. Credit scoring bureaus will calculate the credit utilization ratio for each card separately, as well as the ratio for all of your available credit as a whole. The good news: Once you slash your credit utilization, your credit score will recover rather quickly. These steps will help you kick your balance-lowering mission into high gear.

Monitor All of Your Accounts

Set a goal for yourself to keep all of your credit balances at or under the 30% credit utilization. The trick to achieving that goal is to check in with your accounts frequently. Many card issuers also allow you to sign up for balance alerts via text or email. The more reminders you can have that your balance is creeping past the 30 percent level, the better. That awareness will help you keep your spending in check. If you know that one card is over the 30 percent limit, make a note to use a different card for purchases until you have whittled down the original card’s balance. (This technique will only work if your other cards carry a lower balance.)

Time Your Payments Appropriately

You might not realize that the balance that gets reported to the credit bureaus is the one that appears on your monthly statement. Check a copy of your billing statements to find out the date your billing cycle ends (also known as your account statement closing date). You’ll want to make sure your balance is low just before that cycle ends. That may mean you have to tweak your payment schedule and make payments well before the due date — but it’s worth it for the changes to your credit utilization.

Make Smarter Payments

Paying down debt, as much as possible, is the most straightforward route to attacking a high credit utilization. It unfortunately won’t be the easiest option for everyone. If you can’t pay balances in full, try to at least pay more than the minimum, at least twice a month, to trim your balances. Allocate the highest payments to the card with the highest utilization ratio.

Keep Your Cards Open

When you close an account, you also effectively erase a source of available credit. That, in turn, spikes your credit utilization ratio, as it will appear that you have less credit to use. That’s why you should always keep credit cards open, even if — actually, especially if — they are paid off. An older, paid-off credit card that you don’t use can only enhance your credit score, since it lengthens your positive credit history.

Request a Higher Credit Limit

You may want to ask your credit card issuer to bump up your credit limit. The increase should be just enough to lower your credit utilization ratio. However, make sure that the higher credit limit won’t tempt you into increasing your spending as well — or taking this step could actually compound your high credit utilization woes.

Consider a Balance Transfer

If you have a high credit utilization spread across several cards, it might make sense to transfer all of those balances to a low-interest card. That way, you have freed up credit on several cards, which looks better for your credit overall. Because you will also be saving on interest fees, you can also attack that balance faster. As with the other steps, you need to exercise caution. When you make a balance transfer, remember you are committing to paying down that balance. It is not simply a temporary relief that allows you to continue spending elsewhere.

Having a healthy credit utilization goes hand in hand with building an excellent credit score, and it’s certainly not the only way you can improve your credit profile. Let our team at Ovation Credit help you on the path to improving your score. Contact us today for a free consultation.

Shopping for your dream home can be an exciting experience, but it’s also one filled with a lot of financial paperwork. In order for your mortgage application to get approved while landing a competitive interest rate, it’s important to improve your credit as much as possible. While credit repair is usually a long-term process, there are a few general rules of thumb to go by when you’re in the home-buying process. Follow these tips to maximize your credit score during one of the most important financial decisions you’ll ever make.

Check for Credit Errors on Your Report

When you first start thinking about buying a home, you’ll want to make sure your credit score is starting off from the right place. If you haven’t done so recently, go to AnnualCreditReport.com to access free copies of your three credit reports. These come from the major credit reporting agencies: Experian, Equifax, and TransUnion.

On these reports, you’ll find a listing of all your credit history, including credit card accounts, loans, and any lines of credit. Scour each one to help identify credit errors. If you see anything incorrect, such as a credit card you never opened or an outdated loan balance, you’ll want to take action before applying for a mortgage. Fixing credit mistakes found on a report involves initiating a credit dispute directly with the reporting agency. The process can take up to 30 days, so the earlier you resolve the issue, the better.

Stay on Top of Current Financial Obligations

Having a positive payment history is important during the home loan application process for a couple of different reasons. First, it’s the largest factor in determining your credit score. If you want to improve your credit, making your debt payments on time each month is an easy way to get the job done. A single late payment beyond 30 days after the due date can cause a drop in your credit score.

Additionally, your mortgage lender reviews entries in your credit report. If you have recent late payments, your application could be affected. At the very least, you may need to write a letter of explanation outlining why your payments were late, even if it happened a few years ago. To make the mortgage process as quick and easy as possible, it’s best to have as few late payments as possible, especially in recent months and years.

Make Multiple Credit Card Payments Each Month

Your mortgage application also includes a review of your existing debts. For an easy way to fix your credit score, consider making several payments a month on any credit card balance you may carry. The reason for this is that your credit report reflects just a moment in time, not the most up-to-date data. For example, if the mortgage lender pulls your credit report right before you make a credit card payment, your debt may look higher than it actually is because you haven’t made your payment yet.

Not only can higher debt balances affect your credit score (and consequently, your interest rate), it can also impact how much you’re allowed to borrow for your home. Showing a lower credit card balance could qualify you for a higher loan amount, if necessary.

Hold Off on Major Credit Decisions

Once you decide to actively start house hunting, put your other financial plans on hold. Taking out other types of loans can raise a big red flag to lenders. Plus, it can cause your credit score to drop. If you need a new car, personal loan, or even student loan, hold off until after you close on your new home. You could jeopardize your home loan approval if you take out any new credit.

Similarly, it’s also important not to close any existing accounts during your home search. The average age of your credit accounts is considered as part of your credit score. You could accidentally cause your score to lower by closing out old accounts. From a lender’s perspective, no news is good news when it comes to your credit.

Finally, you should also limit your cash purchases during the mortgage application process. When you submit your bank statements for review by your lender, they may require an explanation for any withdrawal in excess of $1,000. Refrain from making any major purchases until you’ve signed your paperwork at closing.

By following this simple credit protocol, you can make the mortgage application process much smoother and more efficient. At the end of the day, that means a faster closing time, so you can get the keys to your house as soon as possible.

Need some help with credit repair before you shop for a home? Get a free consultation at Ovation Credit.

When you’re working on fixing your credit, or simply paying attention to your score as part of your monitoring efforts, you may be surprised when you see your credit score drop. Whether it’s a significant drop or a minor one, it’s good to stay aware of what’s happening.

Here are six potential reasons why your credit score may have dropped recently.

1. You Have Credit Errors Due to Identity Theft

Identity theft is constantly on the rise. In fact, in 2017 there was a 44% increase in security breaches that exposed personally sensitive consumer information. Because of this, it’s vital to make sure any new activity on your credit report is actually from your own actions. Order a free credit report and scour each account to make sure that you actually opened it yourself. Also, check all of the balances to ensure no one has compromised your existing accounts and charged them up without you noticing.

2. Your Debt Has Increased

You’ll likely see a credit score drop if you’ve increased your debt load, especially if it’s revolving credit rather than an installment loan. You may see a slight dip after you take out large loans, like an auto loan or a mortgage, but those aren’t weighted as negatively as credit card debt. If you’ve upset the balance of your card balances, especially if you’ve maxed out one or more credit accounts, your score is bound to drop. The good news is that you can improve your credit pretty easily by paying down those balances. Typically having just a 30% credit utilization rate is ideal for your score.

3. You Were Over 30 Days Late on a Payment

Being late on your mortgage payment or credit card bill by a few days won’t be reported to the credit bureaus. Once you hit 30 days late, however, the creditor will most likely report it as a late payment. Since your payment history accounts for 35% of your credit score, you’ll probably notice a decrease in your score. Don’t sit on that bill. You’ll receive additional negative entries at 45, 60, 90, and 120 days late. Make that payment as soon as possible to protect your score from being damaged even further.

4. You Closed a Credit Card Account

The age of your credit history influences your score. Consequently, if you close an old account, the cumulative average age of all your accounts will drop. Your score, too, might drop a bit. If you’re paying an annual fee for a credit card and you’re not really taking advantage of the benefits, by all means cancel the account. But if it’s not costing you anything, it might be a good idea to keep that old card in your wallet, especially if you’ve had that account open for several years.

5. You Paid Off a Loan

Paying off a loan isn’t a bad thing, especially if it gets you out of debt or reduces your interest payments. When you do this, however, your credit mix will change, which can impact your credit score. This is especially true for installment loans since they’re viewed as more favorable than credit card debt. Keep paying down those credit cards to help offset the drop in your score. You could also consider consolidating credit card debt into a low-interest debt consolidation loan. It could save you money on your interest payments and also get your credit mix back to a better place.

6. You Had a Derogatory Item Added to Your Report

If you had a collections account added to your credit report or a public record, this can do significant damage to your credit score. A collections statement is added when an account is severely late. To get it removed, you could initiate a credit dispute or make a settlement payment and negotiate to have the listing removed from your credit report.

Alternatively, your score will also suffer if you’ve had anything added like a foreclosure, tax lien, bankruptcy, or civil judgment. These are serious items and typically take between seven and 10 years to be removed from your credit report.

Luckily, these types of public records and any other negative item on your credit report can be removed early. Use a credit repair service like Ovation Credit to help initiate credit disputes with an experienced legal team. You do have rights when it comes to credit repair and you shouldn’t be afraid to exercise them.

Sign up for a free consultation today with Ovation Credit and find out how you can get your credit score back on track.

Once you’ve started to check your credit score on a regular basis, you may notice that the score tends to fluctuate. If you were to pull your credit report once a month, you might see changes in your credit score — or even on a daily basis (although that’s not recommended). The simple explanation is that your score is changing based on real-time updates to your credit report. If you check your score right before you make a payment on a loan or credit card, and then check it afterward as well; you might see slight differences. A number of factors could be at play, depending on your recent credit history.

Late Payments

The first thing you’ll want to consider is if you have had any missed or late payments recently, which tends to be the most significant reason that credit scores can fluctuate. Late payments remain on your credit report for seven years, even if you only missed the payment by a few days.

Changes in Credit Utilization Ratio

If you made a large purchase or paid off a substantial debt, your credit utilization ratio may change — which is part of the formula that the major credit bureaus use to determine your credit score. Your credit utilization ratio is calculated by dividing the amount of your debt on a credit card by your credit limit. For example, if you rack up $5,000 in spending on a credit card with a $7,500 limit, your credit utilization ratio will increase. On the other hand, if you made a large payment on a revolving credit card loan, that ratio would decrease, as you are now using less of your available credit.

Opening New Accounts

If you open a new account or take out a new loan, that typically shows up as a “hard inquiry” on your credit report, lowering your score. That is one reason why experts recommend not opening too many accounts at once. However, hard inquiries have less of an effect on your overall score than other factors.

Age of Accounts

As accounts grow older and cross certain thresholds, credit bureaus view them as less important in the overall calculation of your credit score. The bureaus consider the age of the oldest account, as well as the average age of all of your accounts. In addition, any credit “events” are deleted from your credit report once they pass the seven-year mark. So the fluctuations to your credit score could be the result of a negative event falling off your report or simply the passage of time lapsing since certain entries in your credit report.

Closing an Account

If you decide to close an account that you no longer use, that might cause your overall available credit to decrease, affecting your credit utilization ratio and therefore, your credit score. It’s typically recommended to keep old accounts open for that reason.

Changes to the Number of Loans or Accounts

To gauge your ability to pay debt responsibility, lenders want to see a diverse amount of open accounts and loans. Paying off a loan — even if it’s the largest one you have — will cause some changes to your credit score. Also, if you are opening a lot of accounts at once, your score may also take a hit as it may appear to lenders that you are struggling financially.

Word to the Wise

While regular credit report checks are a healthy part of credit management, you’ll want to resist the urge to check your score too frequently. And make sure you’re comparing apples to apples — your credit score can vary between the different scoring models, since each model uses its own specific formula. Fluctuations are normal over a daily or monthly basis, but it may take longer than that for your credit score to reflect your efforts to improve it. Keep in mind that slight changes over a brief period of time matter less than the overall picture.

It’s critical to check your credit report every so often to make sure the information being reported is both accurate and timely. Credit report errors are another common culprit of credit score fluctuations — and luckily, you can get them removed from your report. If you believe your credit report may contain errors that are causing your score to fluctuate without good reason, contact the pros at Ovation Credit. We’ll be happy to talk through your concerns, review the report, and work with the credit agencies on your behalf to remove the errors.