Having a good credit score is necessary to make purchases and even when it comes to getting approved for decisions. Without strong credit, it’s almost impossible to make it today. Nowadays credit is needed for much more than only loans or credit cards. Businesses desire to also extend services and products based on credit score ratings.
“Without having a good credit score, lenders don’t want to do business with you.”
Credit Score Secrets
To get a mortgage loan to buy a house, the lender will require that the borrower also has good credit. Generally, a score of 650 is considered fair. Scale for FICO score ranges 300-850. Anything that falls at 650 is factored as subprime and will result in a higher interest rate. Not the most favorable credit card interest rate or loans.
Before a mortgage lender approves you for a mortgage loan, they want to know that you won’t default on your mortgage loan.
Borrowers can qualify for an FHA loan with a down payment as little as 3.5% for a credit score of 580 or higher. The borrower’s credit score can be between 500 – 579 if a 10% down payment is made. It’s important to remember though, that the lower the credit score, the higher the interest borrowers will receive.
For borrowers interested in buying a home with an FHA loan with the low down payment amount of 3.5%, applicants must have a minimum FICO score of 580 to qualify.
Secrets Lenders Don’t Tell
Low Balances: Keep credit card balances to 10% percent or less of available limit on the balances. If possible pay off credit card balances monthly. Also carrying large balances on your credit card monthly will also drive your credit score down.
Utilization rate should remain below 30% percent of available credit will help to keep the credit score high.
Pay Timely: Never pay bills late and always pay bills on time. It helps to keep older accounts open and not to open too many accounts at once or in a very short period of time.
Build History: Credit history makes up 13% percent to 15% percent of your overall credit score. Building long credit history is very important.
If you need to fix your credit score, purchase our Credit Audit Training Forms.