If you’ve been thinking about buying a home, you’re probably also wondering about your credit score. Having the right credit score or credit history is essential if you want a mortgage loan with a great interest rate.
So, what’s a good number for a credit score? You will need a credit score of at least 620 for a conventional loan. If your score is lower, you may still qualify for an FHA, VA or USDA loan. Of course it’s always possible to improve your credit score. Follow these tips to move your credit score in the right direction.
Review It to Make Sure There Aren’t Any Mistakes
Credit reports aren’t always completely accurate. They might contain mistakes or inaccuracies that harm your credit score. Review your report in detail to make sure it is correct. A few things to look out for: misspellings, incorrect payment statuses, duplicate accounts, fraudulent accounts, incorrect accounts, and outdated information.
Eliminate Your Credit Card Balances
If you have outstanding credit card debt pay it off or at least arrange for a payment schedule as soon as possible. Credit card debt is not only harmful for your credit score but it also costs you a lot of money due to the high interest charged.
Aim For 30% Credit Utilization or Less
You should use about 30% of your credit available at any given time. For example: if your limit on a given credit card is $1000, you should use no more than $300, once you have used close to that amount you should pay it off before using anymore.
Pay Your Bills on Time
Paying your bills consistently on time will signal to potential lenders that you are responsible when it comes to your payments and will make you a better candidate for a loan. Paying your bills on time is also one of the largest contributing factors to your credit score. The key is making sure you are organized and have the funds available when needed; creating a budget can be a big help.
Keep Older Accounts Open
Your credit history also considers the length of time you have had the accounts, so it is important to keep older accounts open as proof that you have a long record of paying your bills on time and managing your budget.
These are some general tips on how to improve your credit score so that you can be a better candidate for a mortgage loan with a great interest rate, but your best ally will be an experienced Mortgage Banker, who will be able to review your specific financial situation and explain all of your mortgage options so you can make the best choice for your family.
Reaching out early in your journey will assure that your Mortgage Banker will be able to give you the best guidance, so get in touch with one of our experienced local Mortgage Bankers today! When you are ready to start searching for a home, use our home search platform, where you can discover new neighborhoods and homes listed for sale, save your favorites and get help from our recommended Real Estate Agents. You can also get a cash reward of 0.5% of the value of the property.
At Resource Financial Services, we love making people’s dreams of home ownership a reality. Visit us online today at rfsmortgage.com to get started. Then contact a Resource Financial Services mortgage banker at 877.797.4545 to discuss your mortgage options and your financial goals. Let us walk you through the process and welcome you home to a better mortgage.