A credit score may be good news for some and bad news for others. As lenders, collection agencies, and public records report newer credit data, your credit score constantly changes, making it difficult to determine how one transaction might affect your score.
If you find yourself with a bad credit score, you’re probably thinking of ways to improve it. One way to boost your credit score is by selling your house in Los Angeles.
Why Sell Your House To Improve Your Credit
Generally speaking, when you sell your home, you pay off all outstanding mortgage, which can improve your credit score. Many people do this for various reasons:
#1: The Transaction Remains In Your Credit History
Since selling your home allows you to pay off your mortgage in full, this action will stay on your credit record for a period of 10 years. It’s a perfect way for creditors to look at your record and be impressed that you’ve paid your mortgage in full.
#2: Reduce Your Other Debts
By paying off your mortgage, you have more money to pay off other liabilities. By doing this, you will see your credit score boost over time not only because of the mortgage payment but also with lower debt.
#3: Qualify For Other Types Of Credit
Selling your home to improve your credit score also allows you to qualify for other types of credit. Depending on your score, a positive rating could qualify you for a car loan, a credit card, insurance, and other opportunities.
Why A Home Sale Might Hurt Your Credit
However, selling your property might not always boost your credit score. Here are some instances:
#1: You Sold Your Home At A Pre-Foreclosure Sale
A pre-foreclosure sale happens when you sell your home because you failed to make mortgage payments, prompting the lender to issue a notice of default. According to credit experts, this would cause your credit to drop by up to 160 points, depending on your score before the sale.
When you’re considering a short sale, it’s important to evaluate your options carefully. The process of restoring your credit to its former standing could take years.
#2: You Failed To Maintain The Momentum Of Selling your Home
A home sale might give your credit score its much-needed boost, but you also have to maintain that score. When you obtain mortgage of a new home, you have to make your new payments on time. Otherwise, your effort of selling your previous party would be for nothing.
Smart Ways To Sell Your Home
If you’re convinced that selling your home could give you that much-needed boost in your credit score, then you can choose to sell in two ways:
Option #1: The Traditional Way Of Selling
The traditional way of selling involves putting up your house on listings and negotiating with potential buyers. This method might require you to hire a real estate agent to speak to potential buyers and close a sale.
However, this method of home sale can be time-consuming and expensive. Aside from paying commission to the agent, you might also have to spend on remodeling the property to make it appealing to potential buyers. Also, the wait to close the sale could take months, and some potential buyers end up falling through the sale.
Option #2: Selling To Cash Home Buyers
Selling to a cash home buyer is an ideal solution if you want to sell your house quickly. The buyer inspects your property and determines its value. Then, they will make their cash offer, which you can negotiate then and there. Selling the house to a cash home buyer usually takes a few weeks, allowing you to get the proceeds of the sale right away.
A home sale could have a significant impact on your credit score. However, as long as you’ve managed to make your mortgage payments on time, selling your current property will help you continue showing to lenders that you’re a responsible borrower.
Sell Your House In Los Angeles—Fast
If you’re considering selling your property, look no further. Inhouse Offer is a trusted company that buys Los Angeles houses for cash in their as-is conditions.
Avoid the headaches that come along with selling your house to us. Doing so helps you get out of cleanup and repair costs. No need to update your property. No closing costs.
For more information about our cash buying service, call us today at (941) 419-3126.
