Who would have thought that??

The warmer months are always great for selling or buying a house. Everything looks and feels better in Spring and Summer. Of course you know that you should have a decent if not great credit score when buying a house. But why should you repair your credit before selling your house?

When you want to sell your house it usually happens through public channels. Meaning the realtor will list on the MLS, hold an open house, maybe even hand out flyers. So when you owe money to someone, that someone most likely will learn about your intention to sell an asset. And when you convert this asset into money, the debt collectors are only too eager to show up and hold out their hands.

So it’s only prudent to clean your credit report before you close escrow. And don’t forget, many sellers will want to become a buyer again at some point. Which means you need this good credit score to buy property again. And you want to buy at a good interest rate in order to save over the course of the mortgage.

Lenders not only look at a good credit score, they also look at the debt-to-credit ratio and the debt-to-income ratio. By removing third party debt collectors from your credit report, you will show less debt. Some lenders will advise you to pay off or pay down outstanding debt. Paying off debt does not automatically remove the negative entry from your credit report. Keep this in mind when weighing your options. A lender does not know consumer law the way a consumer education company does.