20 Tips To Get Your Credit In Check In 2016

Struggling to get your credit cards paid off? Juggling balances between several cards? Just plain tired of paying interest? Make this the year you get your credit in order. Whether your goal is to buy a new home, become debt free and raise your credit score, or just make your payments more manageable, these 25 tips for handling your credit can help get you there.

1. Talk to a lender - If you're planning to buy a home anytime soon, a call to a lender can clarify what you'll need to do in order to qualify (and qualify for the best rates).

2. Check your credit - You can pull your report once a year at AnnualCreditReport.com for free.

3. Dispute anything that's incorrect - It may take some time and effort, but removing incorrect items from your report can have a great impact on your score.

4. Don't waste your time trying to get collection accounts off your credit report - "Be aware that paying off a collection account will not remove it from your credit report," said myFICO. "It will stay on your report for seven years."

5. Set little goals - Paying off a large balance can seem overwhelming. Setting weekly or monthly goals to pay down your credit can make it feel for manageable, and also help keep you on track when that handbag is calling your name.

6. Pay off the smallest accounts first - It may seem smarter to attack the large balances first, but getting small balances paid off will lower your monthly output and allow you to redirect those funds to other balances once they're paid off.

7. Or, pay off the account with the highest rate first - Since this is the one that's costing you most every month.

8. Contact your creditors - It might be that they have a program to help you pay your debt.

9. Negotiate your rates - A call to your creditors may yield a lower rate.

10. Transfer balances - You can make it easier to pay your balances by taking advantage of an existing card with low or no interest?

11. Don't have a card with a low rate? Open a balance - transfer credit card - "This allows you to move expensive debt over to a new card, with a low - often 0% - APR for a set time period," said Bankrate.

12. Get a secured card - If you're trying to reestablish credit after a bankruptcy or after paying off old delinquent accounts, a secured card from a bank can help you build it back up.

13. Even if you can't wipe out all your debt now, pay down your balances - "One of the major factors in your credit score is how much revolving credit you have versus how much you're actually using," said Bankrate. "The smaller that percentage is, the better it is for your credit rating. The optimum: 30 percent or lower."

14. Pay your bills on time - It's the easiest and most effective way to keep your score good - or improve it.

15. If you're buying a home, don't apply for any more credit cards without your lender's approval - That Kohls card may save you 15% on your first purchase but it can also ding your credit score.

16. Set up payment reminders - If you're the type that forgets or overlooks payments, make sure you've got it covered. Setting a reminder from the creditor or putting a reminder in your phone can help.

17. Set your accounts on auto pay - You're less likely to miss a payment if you have it set up automatically to draw from your account. Just make sure you keep enough money in your account to cover the payments or you'll have to pay overdraft fees.

18. Use cash for everything - Financial experts often recommend this tactic to keep us in check about what we're actually spending. There aren't any surprises at the end of the month when you're only using the dollars and cents you have in your wallet.

19. Think about debt consolidation - Many experts consider this a last-ditch resort because its "quick fix" solution may actually cause more problems down the line. Be sure to read up to make sure this is the right step for you.

20. File for bankruptcy, but only if you have no other option - "While going this route allows you to wipe the slate clean, it also has a devastating impact on your credit," said Smart Asset. "Bankruptcy is meant to be a last-resort option but there are certain situations when filing may be your best bet:

You're being sued by debt collectors

Your wages are being garnished

You can't pay your bills (due to a job layoff or an unexpected illness)

You're in danger of losing your home"

TEN STEPS TO BUYING A HOME

You're ready to take the leap and buy a home. If this is your first time, you may want to know what to do to make the process go more smoothly. Here are ten steps you'll be going through to buy your next home.

Check Your Credit Reports and Scores - You get one free look at your credit reports annually. Go to AnnualCreditReport.com and see how easy it is to get credit reports from the three major credit bureaus, Experian, Transunion, and Equifax. You'll need all three because they each report differently, so you may find an error at one bureau but not the other two. You don't know which credit bureau your lender will use so you want all three bureau reports to be accurate. If you see a mistake, contact the bureau and alert them to the error. Send a copy of your proof, such as the paid balance.

Get prequalified - Your lender will "run your credit" to look at your credit reports and evaluate you for risk. Your income, credit scores, payment history, revolving debts, obligations such as child support as well as the type of loan you choose are all factors in determining your interest rate and other terms of the loan. The lender will also consider how much home you can buy based on your down payment; smaller down payments mean higher monthly payments. Last, the interest rate and terms (30-year, fixed or adjustable rate) will determine what you can afford in monthly payments.

Make your wish list - Decide where you want to live and how many bedrooms and baths you'll need. Consider lifestyle -- condominiums offer shared amenities, with little responsibility. Single-family homes offer more space and privacy, but much more exterior and yard maintenance. Think about how far you're willing to commute to work. Make a list with five must-haves and five deal-breakers that you absolutely don't want. Be willing to compromise if you find a home with most of the things you want.

Hire a real estate professional - Your real estate professional should be expert in the area where you want to live and familiar with the type of home you want to buy. Your agent has house-by-house experience in your neighborhood and can offer the best advice on homes in your range. Ask for referrals from people you know who have recently bought or sold a home or choose an agent in the neighborhood who is less than five minutes from the neighborhood you want.

Select your home - No home is perfect, so expect to find a few things that are disappointing. Try to see past minor flaws such as bad paint colors or old carpet. Think long-term. Is this the house you would want if it were painted and recarpeted? Which home best suits the activities and needs of your household now and in the years ahead? Don't buy more than you need or can comfortably afford.

Make an offer - You're either in a buyer's market or a seller's market, so your offer depends on the current market conditions. If a home has been on the market a long time, you can ask the seller for a price reduction, repair concessions, and help with closing costs, but if it's new on the market, the seller is unlikely to accept an offer lower than 95 to 97 percent of the asking price. Ask your real estate professional for advice and a CMA so you can determine a fair offer price. Be sure to make your offer contingent on a satisfactory inspection.

Get an inspection - A home inspection is a professional third-party opinion of the home's condition. The inspector works for you, so it is his job to point out problems big and small. He will check age of all systems, note large and small repairs that are needed, code violations, and so on. Some inspections are not included, so you will have to hire a separate experts to look for pests, or inspect the septic tank. You need to know what problems and expenses you'll be facing as the next owner.

Renegotiate Terms - If the inspection reveals a problem that is more severe or is not noted on the seller's disclosure of the property, you should renegotiate terms. Either ask the seller to fix the problem or ask for a price reduction if you prefer to fix it yourself.

Get an appraisal - The bank appraisal determines market value. If the home doesn't appraise for the purchase price, the bank will refuse to make the loan unless you increase the size of your down payment or renegotiate a lower price with the seller. If the home meets the appraisal comparables, the lender will move toward closing. Pay close attention to the comparables that the appraisal uses -- they may skew the value in a different direction than you might be expecting.

Go to closing - Once final negotiations are complete, and you've done a final walk-through of the property to make sure all repairs have been made, the parties to the transaction meet at the escrow office. This office could be a title company, real estate attorney, or whatever is customary in your area. All paperwork is signed by both parties. The lender pays the seller, minus any liens against the home such as the seller's mortgage. Once all the disbursements have been made, you get the keys to your new home, according to your agreement.

Congratulations! You're ready to move into your new home.

HOW TO NEGOTIATE WITH SELLERS

If you dread the negotiating process when buying a home, never fear. When you hire a Realtor you will have a partner that is an experienced negotiator who helps keep the bargaining from becoming emotional and veering off track.

Your Realtor must know your desires by heart and have quick access to you if a negotiation point needs to be made. It's important to stick to the strategy you and your agent have agreed upon -- showing the seller how strong your offer is.

First, get pre-approved for a mortgage loan. That means your mortgage lender has reviewed your credit history and assets, checked employment and income, examined your debt-to-income ratios, and has pre-approved you for a certain amount, terms and interest rate so you know exactly how much you can spend.

Being preapproved shows sellers that you are prepared and able to buy. Before you submit an offer, ask your agent to find out more what the seller wants as far as terms. The more your offer matches up with the seller's requests, such as a closing date, the more likely your offer will be accepted.

Find out when the house will be vacated, if any repairs or improvements are planned, and if the seller has any pressure points such as a relocation deadline. Also, you'll want to review the seller's disclosure of the condition of the property.

Your agent must also find out if other offers are on the table. Your position is stronger if there are no other offers. The seller may be less likely to bend on price concessions or repairs if there are other offers.

Have your agent pull up the most recent CMA (comparable homes recently sold or on the market) within a reasonable radius of the home, so you can sculpt your offer price. Be sure that you are comparing apples to apples in terms of updates, size of the home, amenities, location, schools districts, etc.

Once these steps are made, you are ready to write an offer.

Making the offer

Make yourself think like the seller. It helps you anticipate what the seller will accept in price, terms, and other conditions. By considering the seller's position, you will likely create an offer that is either accepted or strongly considered.

Your offer should be clear on the terms, closing dates, repair requests or other conditions the seller needs to meet and it should be accompanied by a letter from your lender that you are preapproved to buy the seller's home. Include a cover letter summarizing your strengths as a buyer in terms of creditworthiness, flexibility in closing, and the strength of the offer.

Don't insult the seller with an offer that's too low or requires too many concessions. The seller may be nostalgic about his or her life in the house and may not like the idea that you want to remodel.

The only thing a seller can't argue with is a strong set of comparables that show the home is overpriced or out of date. These are homes that have sold that are nearby (within two blocks) and similar in age, size and features. If you can show that a similar home has sold within the last two months for less than the seller is asking, that's good.

Be sure all conditions, repairs, etc. are agreed to in writing. Some sellers may feel that a handshake covers a promise, but it's essential to be clear on paper what is expected and when. A seller's promise to paint should be included as an addendum to the contract and include all details, such as primer, exact color and type of paint, how many coats, and when the work will be finished for inspection.

Negotiating after inspections

The offer is negotiated and accepted, the earnest money is at the escrow agent's office. Now the inspections occur, and this is where the contract negotiations can break down.

No home is perfect, not even brand-new construction. During the inspection process, the inspector is usually required to tell you about any condition of appliances, heating and cooling systems, roofs, electrical and plumbing systems, etc, and if your future home is up to current city codes.

Sellers are usually not required to bring a house completely up to current local building codes. Negotiate a repair only when a system is unsafe or a major repair is needed to make the system operate effectively.

As long as the seller has a reasonable explanation of what your position is and why, and communication remains open, the seller should have as much desire to make the contract work as you do.