Your credit score is a major factor in getting approved for a mortgage. What can you do to improve your score?
1 – Check your score before you meet with a lender. Make sure it’s accurate. You can get an idea of the score from Credit Karma or several different sites.
2 – Make sure there aren’t any errors on your report. If you have any disputes on your credit report, we may need to get them updated to show they are resolved. They can affect your credit score.
3 – If you want to increase your score, look at your revolving credit balances. Pay them down to less than 30% of the available credit.
4 – If you have delinquent credit, set up payment plans or work on paying off any collections. Medical collections do not affect your mortgage application – those are debts that are usually not requested to be paid off or payment plans set up for.
5 – The higher your score, the better your interest rate usually. Also the more you put down on a mortgage, the better your interest rate.
6 – We have a couple of clients in our office with scores at 621 getting a conventional approval – with a lot of money down! Another with a 600 score getting a conventional approval!
7 – Watch for errors with student loans. As these loans come out of deferment, they may show up as a 90 day late – we have seen it. Make sure you are aware of when you need to start making payments on any student loans. You may make one payment, but it can show as multiple loans on your credit report due to the loans taken out each year.
Your credit report can make a difference in your loan approval. It can also affect your interest rate and mortgage insurance rates. The higher the score, the better for rates!
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
