How Your Credit Score Can Positively and Negatively Influence Your Home Buying Journey
In order to get approved for a mortgage, we recommend starting with a credit score at 620 or higher. That fact, along with a steady flow of income and employment, is all you need in order to get approved. If you have no idea what your credit score is, many people go to websites such as www.annualcreditreport.com or www.creditchecktotal.com to get all the information they need but we recommend talking to an actual lender to give you a more specific picture of your score.
Review Your Credit Report
We like to say, “There is no bad or good credit just low or high credit” when it comes to understanding where you are. Depending what your score is once your credit report has been pulled will allow you to know exactly what you need to work on to build a high credit score. Generally, lenders like to see your credit score anywhere at 620 or higher. The higher the score, the better interest rate you are offered. So your goal is to work on getting your score above 700. If your score is lower than 620, however, things may get a bit tricky and the interest rates will be higher.
Once you get your report, we recommend your report be reviewed with you and your lender to prioritize which issues need to be addressed and set a timeline for a goal to correct. The Lender will make a list of your debts and separate them into three categories: Quickly (for debts you can pay off in one lump sum), Take Some Time (for debts that will take longer to pay off), and Impossible (for debts that you simply can’t pay off). Now make a plan to pay off the Quickly debts over the next 12 months. After you’ve established this priority list and timeline to correct stay focused and stick to the timeline!
Repair Your Credit Score
It is possible to repair your credit score. It does require you to make some lifestyle changes, spend less and pay bills on time. Before long, however, your credit score will be on the higher end of the spectrum and you’ll be able to get that mortgage you need in order to purchase the home of your dreams! If you have any questions or concerns, Patrick can help with his FREE Real Estate Guide. Credit scores play a big part in the home buying process. If you’re uncertain or unsure about what you should do from here, give us a call and we’ll provide the assistance you’re looking for.