When making the decision to own a home, there a few factors that come into play. One important factor is your current credit score.
Our team at Journey Home Lending wants you to be able to obtain the best mortgage rate possible, which starts with a high credit score. Therefore, let’s look at ways you can give your credit score a boost in preparation for obtaining a home mortgage loan.
What Credit Score Is Needed to Buy a Home?
Are you considering owning a home within the year? Then, you will need to go ahead now and take a good look at where your credit score stands.
When you apply for a home mortgage, our team of professionals will take a look at your credit score, which helps us to decide how likely you are to make your payments if we lend you money for your home.
Although you are able to obtain an FHA loan with a 500 credit score, the higher the better with your credit score if you are wanting as low of an interest rate as possible on your home mortgage loan.
Let’s take a look at ways you can start working on improving your credit score so that it is ready for when you apply for a home mortgage loan.
Take the Steps Necessary to Improve Your Credit Score
First things first, you want to make sure you are paying your bills on time. Especially since this is what your lenders want to know when deciding on the approval of your mortgage loan, you want to prove to them that you are able to pay your debts—and on time!
Therefore, work hard to not miss one single payment. Better yet, pay as soon as bill arrives rather than wait until due date!
Second, you want to make sure that you keep your balances low on current credit cards and pay off any debts you might owe. While it is good to show you are able to make payments on time, you do not want to carry a lot of debt with you into your new home mortgage loan.
As a result, you want to make sure you keep revolving credit balances low.
Finally, if you do have unused credit cards, do not close them. Closing credit cards can actually have a negative affect on your credit score. In addition, do not open any new credit card accounts, as this can cause your credit score to lower, too!
Allow our team to be a part of your home journey! Contact Journey Home Lending to learn how we can assist you with your home-buying needs.