In any mortgage situation, credit score is a vital consideration. Your score will impact which home loans you’ll be eligible to apply for, and can be the single largest factor in determining the all-important mortgage rates you receive for loans you’re approved on.
At Community Lending Group, we have home loan options available for people with all ranges of credit score. A better one gets you more options, though, and this often starts with a solid understanding of the important crux points involved in credit score calculation. Here are these crux points, and how you can stay on top of them.
This is a basic ratio that’s very important to how major credit bureaus calculate credit. It’s not only important that you have credit, but also that you use it and repay it in a timely manner. This proves to them that you’re creditworthy. Add up your total open credit balances, and then divide this total by your total credit limit. If this ratio is too low (ask a broker what your thresholds should be), it could lower your credit score.
It’s also important to show a long history of good credit. For this reason, never close one of your older credit accounts anytime when you might need a good credit score – this will eliminate a source of credit, and lower your utilization rate.
In addition, holding multiple accounts and making on-time payments is a valuable tool for credit score. However, this is a relatively small factor, so don’t go too overboard trying to open up extra avenues of credit if it means putting any other financial area at risk.
There are specific trackers in place within credit score calculators for the average timing on your bill payments. If too high a percentage of them are late, your score will be lowered.
An even worse outcome than late or missed payments involves a derogatory mark – major events like a bankruptcy, foreclosure or lien. These events will stay on your score for years, often decades, and they should be avoided at all costs.
For more information on credit score, or to find out about any of our comprehensive mortgage services, contact a broker at Community Lending Group today.
Q – How long does the process take?
A – It takes on average 30 – 40 days to get your mortgage completed
Q – What are my fees?
A – There are some fees that are part of every mortgage no matter which company you work with. We will tell you which fees are required and which ones are not.
Q – How much money do I have to put down?
A – This varies based on the type of loan. We will help you get the right loan and tell you what you will need before we start the process
Q – What documents do I need?
A – You will need tax returns and pay stubs for sure. There may be other documents that you will need. We will make sure you know which documents are required when we start the process