How can I improve my credit score to qualify for a mortgage?
Credit is one of the most important factors when qualifying for a mortgage. Many loan programs have minimum credit requirements for loan approval. Furthermore, higher credit scores often translate into better interest rates. Even if a mortgage company will approve a mortgage for an individual with a lower credit score, the borrower is often stuck with a less-than-desirable interest rate.
How To Improve Your Credit Score For Mortgage
Below are tips:
- Pay down credit card (revolving) debts to below 20% of the high credit limit. This means if the high credit limit on your credit card is $1000, then try to only use up to $200.
- Paying off high credit balances is often the fastest way to improve credit
- Pay current installment debts on time.
- Don’t open new credit
- While it’s important to establish credit, opening new credit doesn’t necessarily help your credit score in the short run
- Collections and judgements create a drag on your credit score and can make it hard to improve your score. That being said, addressing collections or judgements can have a negative effect on your credit score
Think about a mortgage or ways to improve your credit score for Mortgage? Contact Timothy Lee here for the latest information on programs that may benefit you.