Improve Your Rating, Avoid Bad Credit Mortgage Loans
It’s always important to have a good credit score.
But why is this more important than ever? Take a look around the world of mortgage lending and you’ll see what more and more providers are cracking down on bad credit home loan approval.
These resources have simply become too risky for lenders. As Quicken Loans Chief Economist Bob Walters put it:
“Recent changes in the mortgage market have caused mortgage lenders to tighten their credit standards. This has meant that folks with impaired credit, who were able to get home financing in the past, may find that getting a mortgage now may be more difficult. This is all the more reason why improving one’s credit score is so important.”
This is why you need to keep your credit score over 620. Once you decide to purchase a home, do you really wanna risk being turned down for all home mortgages because lenders can’t trust your financial record?
After all, number of home loans available to those with a number below this are starting to diminish. That’s why the following question and options are so important right now …
What Can You Do to Improve Your Score?
The best way to raise your credit score is to pay your bills on time. This proves to lenders that you’ve learned to manage your finances wisely - and they will then be more willing to give you reasonable mortgage rates and loan terms.
There are other ways you can improve your score:
- Managing credit cards wisely. Don’t run up high balances and don’t close accounts to remove them from your report.
- Resolve any discrepancies or errors on your credit report. You may find your name is misspelled or you may find an account you closed still being reported as open on your report. Make sure your credit report is reporting accurate information.
- Pay off your debt, rather than move it around. The amount of overall debt you have is reflected in your credit score, so moving it from one place to another does nothing. It’s better to just pay if off to prove to lenders you can be financially responsible.
SOURCE: Quicken Loans