Watch Over Your Credit Before Getting a Mortgage

Credit score is one of the most significant factors when it comes to the lender to decide for your eligibility for the new mortgage. Basically it is your credit score that determines if you can meet the criteria for a loan and how much you will pay for it.

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Being a borrower, you should not overlook the importance of your credit score and must know the following basic facts.

What Impact your Credit Score:

  • Your Bank Accounts – its types and the balance history
  • Since how long you are operating these accounts
  • Percentage of current balances to the credit limits
  • Your past payment schedule
  • Delinquent Accounts – if any
  • Bankruptcy, liens, collection accounts

These are the few important factors that have strong impacts on your credit scores. So work on your credit score improvement 3 to 4 months before you apply for a mortgage.

Things to Avoid before Applying for a mortgage:

Below are the crucial things that should be avoided when you apply for a mortgage.

  • Do not get any new credit card, months before applying for a mortgage.
  • Do not open new accounts to transfer your credit balance. In other words, keep your existing accounts financially strong.
  • Do not run up your credit card balances, instead reduce them.
  • Do not get any auto or personal loan that requires you to get a new loan financed.
  • Close the accounts having low or no balance
  • Make your payments on time; do not let your payments go over 30 days late.

Furthermore, read your credit report carefully and make sure that there is no error or discrepancy. In any case, get it resolved immediately. Your Credit score means so much to your lender and thus you should be very much careful about your credit score along with your credit report accuracy.

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