Credit knowledge important for homebuyers

Due to more rigorous approval procedures, it can be difficult for prospective homebuyers to obtain a mortgage. But understanding how the credit system works can help borrowers overcome obstacles that might stand in the way, according to real estate experts who spoke at a recent gathering.

The 2011 Realtors Conference and Expo was held in Anaheim, California, in November. Realtor and real estate instructor Chandra Hall spoke about how an individuals' credit scores are significant determinants of whether they'll be approved.

"Your credit score can affect where you work, what car you can drive, how much you pay for insurance and where you live," said Hall, according to Silicon Valley Community Newspapers. "It's imperative to know how credit scoring works and how to achieve the highest possible score."

She added that credit scores are basically numerical representations of how likely borrowers are to pay off their debts and that they're derived from consumers' payment histories.

Gene Lentz, president of the Silicon Valley Association of Realtors, also spoke at the event and talked about credit, according to the news source. He said one of the best ways of keeping credit scores high is by paying bills on time. In addition, he cautioned consumers to review their credit files to make sure there aren't any errors, as these may unfairly lower credit scores. If they're spotted, the marks should be disputed.