Do you know your credit score?
Whether you’re a first timehomebuyer or experienced homeowner looking to move up, a good credit score iskey to getting a mortgage. Everyone should know their credit score and reviewtheir credit information periodically to make sure there are no mistakes.Correcting errors can be frustrating and time consuming so don’t wait until you’reapplying for a loan to check your score.
Do you know what the numbers mean?
Credit scores range from200 to 850. You will probably need a score of at least 620 to obtain aconventional mortgage at a favorable interest rate. But that’s just one factor –even a score in the 700’s is doesn’t guarantee loan approval.
Do you know what affects your credit score?
You earn a goodcredit score by paying your bills on time, avoiding excessive debt, and keepingcredit cards and lines of credit well below their maximum limits. Latepayments, liens, foreclosures, and bankruptcies drag your scores down and itcan take years to bring them back to acceptable levels. But it is important tohave a credit history – you need to use credit to get credit. A long history ofinstallment loans or credit card usage showing regular payments is helpful. Newdebt is considered riskier so avoid taking out any new loans or addingsignificantly to your credit cards if you’re planning to apply for a mortgage. Beaware of changes in how scores are calculated. At least one major reportingagency will begin taking homeowner association fees into account. So if you owemoney to your HOA, they can damage your credit as well as put a lien on yourproperty. Rent payments may be considered as well. Bottom line – use creditwisely and pay all your bills on time.