Your Mortgage and Your Credit Score
You think you're ready to purchase a new home.
You've looked at neighborhoods, floor plans, and tracked the miles to work. You've collected the names of all of the real estate agents that your friends and family have suggested. You have even decided that you will need to paint the door holly red like the home in your favorite decorating magazine. You're ready… or are you? Have you considered the one piece of information that will affect the home you can afford, the neighborhood you will live in, the interest rate that you will pay and the monthly mortgage that you will write checks for the next thirty years? What have you missed? Perhaps the most important piece of the puzzle. Your credit score! It will affect all of this and even your ability to buy a house at all.
You must know your credit score.
By the time you finish purchasing your home everyone will know your credit score. You should know it first. You need to know the score and some of the items that affect it.
Things that negatively affect your score:
Now, before you do anything else towards buying your new home. Stop, and order your credit report and score. If you can figure out what color to paint your front door you can find a website that will provide you with all three credit reporting companies and your score.
Why be so concerned about your credit score?
Your loan officer will be concerned about your credit score. In fact everyone that will assist you in buying your home will be interested in your credit score. Your lender will look at your credit score as a way of determining how likely you are to be faithful to your home loan. It's a numbers game.
| You have a Credit Score of: | Chances you will be a delinquent account: |
| 585 | 44% |
| 615 | 11% |
| 660 | 1% |
| 700 | .03% |
Wow, would you loan money to your best friend if you knew he had a score of 585 or below. Probably not. That is why lenders are not eager to lend money to people with low credit score.
What should you do if you have a low credit score?
If you have a large amount of outstanding debt, start paying it off. Give up your latte a day and give that money to one of your credit companies. Your latte will taste better from the kitchen of your new home. Wait to buy the new car until after you have moved into your house. Clear up any of the inaccuracies on your credit report.
Now that your credit score is rising like a rocket, looking for the holly red paint will be easy.
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Credit Report Repair Information |
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