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Improving Your Credit Score for Mortgage Application

By Malcolm Rivers

When considering applying for a mortgage, many factors can influence your decision. No matter which type of options you choose to examine or pursue (there are a variety of options, more information can be found here one of the factors that will definitely influence your decision is your credit history, as represented by your credit score. Credit score ratings can be understandably confusing and complex but the most important thing to remember is this; the higher your credit score, the more options you have for potential mortgages. What follows is 5 tips to bring up your credit score so that you're more likely to get the most out of your mortgage options.

Credit score basics

A credit score is a number that represents the perception of a person's likelihood to repay their debts. There are multiple types of credit scores available, though the major score types are FICO, VantageScore and CE Score with FICO's scores representing the well-known and widely accepted. Credit is made up of several factors including bill payment history, new accounts, length of credit history and total debt in someone's name. The range of possible FICO credit scores is 500 through 850. The median score is around 720 with near 500 representing very bad credit and near 800 representing exceptionally good credit. Credit scores are very important when considering getting a mortgage because better scores make more mortgage types available and can lead to better interest rates and the like here so be sure to pay attention.

Tips for Improving Credit

  • Manage your bills religiously Basics like paying bills on time, making sure your payments are current as quickly as possible and keeping effective records make a huge difference and won't improve your credit overnight but will do wonders for building good credit in the long run.
  • Check credit reports (keep in mind there are at least 3 to consider) Keep in mind that there are at least 3 major types of credit scores to consider so you should keep a regular schedule of checking your credit to make sure its going in the direction you want it to and allay potential issues should they arise.
  • Keep balances low The easiest way to avoid credit issues and improve your credit is to keep your balances on credit low so that you don't have to deal with outstanding amounts of debt or have to delay repayment.
  • Sparingly apply for and use credit This may seem obvious but keep it in mind nonetheless. Your credit score is partially determined by your credit history and your total debt, elements that are both influenced by how much credit you use and how effectively you use it. Fewer credit accounts means less potential debt and fewer balances to keep track of.
  • Use credit carefully Maintaining credit accounts (the fewer, the better) which you keep up with regularly and use to pay basic bills or other foreseeable, stable costs can build good credit history to counterbalance any previous credit issues.

Using these tips you can improve you credit rating, though you should always keep in mind that any change will be gradual. Credit scores are very important when considering options like conventional, VA or FHA mortgages, so manage your credit effectively and you'll be in the best position possible to make your home buying dream a reality.

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5/31/2017

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About The Author

In 2005, Malcolm attended Harvard University where he received his Bachelors of Arts...

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