How Your Credit Score Affects Your Chances of Getting a Mortgage

It’s no secret that the key to getting a good mortgage is to have good credit. Home buyers with a good credit rating will get the best mortgage offers – it’s as simple as that. Maintaining a strong credit history should be the number one priority of anyone looking to climb the property ladder.

Anyone with a history of bad credit who has tried to take on a new mortgage will know what an uphill struggle it can be. Some lenders will want to renegotiate for higher interest rates as they perceive buyers with poor credit scores a lending risk; others will flat out reject mortgage applications from buyers with low credit scores. This makes it difficult for anyone who has had money trouble in the past to become a homeowner. Recent immigrants, young adults and first time home-buyers are groups that have trouble getting mortgages due to a lack of credit history.

Although there is no quick way to change one’s credit rating overnight; there are a few basic things a prudent individual can do to improve their credit score. First and foremost, it is important to make periodic checks on credit reports. Credit reports are not infallible; mistakes do happen. Seeing one’s credit reports in advance gives the aspiring homeowner the opportunity to catch and correct any errors before anyone else sees them. It also gives the individual the chance to see if there are any missed payments he or she may have forgotten about. Needless to say, paying off any outstanding debts will go a long way in improving credit scores.

All consumers have the right to check their credit scores. It is a myth that checking one’s own credit history negatively impacts their score: it doesn’t. An individual can check his or her own credit history as many times as they want with no negative consequences to their score. There is an impact, however, when outside entities such as mortgage companies or car dealers look up an individual’s credit history.

Common errors in credit reports include things like debt that is not actually owed; these can be rectified by sending a dispute letter to the credit bureaus. In addition to fixing mistakes on a credit report, the only other way to maintain a good credit rating is to keep a regular schedule of on-time debt payments, avoid defaulting on loans and keep a balance of less than 50% on all credit cards.

Keeping a healthy credit history is the only way of obtaining a mortgage with favorable terms and conditions. Home-buyers armed with good credit scores will be the first to get low mortgages in San Diego with low interest rates and comparatively better loan terms.

Do you qualify? Check the possible mortgage rates for the San Diego home of your dreams.

How Your Credit Score Affects Your Chances of Getting a Mortgage

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