Your credit score impacts how much house you can afford and the interest rate you’ll pay over the life of your mortgage. So today we’re exploring some FAQ’s my team and I get when it comes to credit scores and the lending process. Plus, enjoy a special offer from one of my credit professional partners!
Naturally, some factors impact your mortgage rate and amount including your financial big picture and debt to income ratio. And today we’re focusing on a major key to your home buying process: Your credit score.
If you have a great credit score you may be able to qualify for a fantastic mortgage rate. And if your score is less than amazing, you may want to plan ahead to improve your score before you try to qualify for a mortgage.
What Credit Score Do I Need To Get A Mortgage?
If your score is at 740 or higher you’re in what most lenders would consider excellent shape with regard to your credit.
On the other end of the spectrum, anything below 630 is considered to be a poor credit score.
So, while there’s no “perfect score” that will get you any mortgage, it’s safe to say that a higher credit score will be extremely helpful in allowing you to secure more money at a better rate.
Can I Get A Mortgage With A Low Credit Score?
The answer is… maybe. Although FHA, VA, and USDA loans have credit score requirements that vary from traditional loan types, a solid credit score is still ideal in those types of mortgage situations as well.
And the impact of a higher interest rate because of a lackluster credit score could have you paying more over time than you would if your score was even 100 points higher.
What Factors Impact My Credit Score? How Can I Improve My Credit Score To Get A Better Mortgage Rate?
If your credit score is not where you want it to be right now, don’t panic. Buying a home is a process that you can plan for and credit scores can be changed.
Some things that can help improve your credit score include:
Paying on time
Paying more than the minimum amount due if you’re carrying a balance
Avoiding “maxing out” your credit cards (Ideally this means keeping spending at no more than 30% of your limit)
Keeping cards open longer in good standing so the age of your credit card history grows
Focus your loan application time to 30 days so that credit inquiries are not too spread out
Review your credit report for errors and look to fix them
The important thing to remember when it comes to credit score is that you can make incremental changes that make an impact.
And if you’re hoping to improve your credit score, you’re in the right place.
Ready To Get Serious About Your Credit Score
One major way to get serious about improving your credit score is to get clear on where you stand right now.
If you’re not sure what your credit looks like, it’s time to get that clarity from trusted professionals who can help you navigate your better credit journey.
The Team at Better Qualified is offering our readers a free credit report and credit analysis.
To take advantage of this offer head over to https://www.betterqualified.com/apply/
And in the “How did you hear about us?” box type: Tamara Sabatino. Paul Oster and his phenomenal team will connect you with resources to help you transform your credit journey.