Your Credit Score
Your credit score is an important indicator of your creditworthiness. In general, the higher your score, the lower the probability that you will become delinquent on credit extended to you. And while many mortgage brokers and lenders use bureau scores to help them make lending decisions, each mortgage broker and lender will base its decision on more than just the score.
Mortgage Brokers and lenders use your credit score to determine if you are a good candidate for credit. In the event of bankruptcy, it will also help them determine what type of repayment plan is best for you.
Because your credit report is updated every day, your bureau score is recalculated continuously. So your credit score from a month ago is probably not the same score today.
If you feel you have poor credit don't let that stop you from proceeding with home ownership. Contact us and we can help you obtain a mortgage.
What is used to calculate your credit score
- Payment history - Indicates whether you have made your credit card payments, loan payments and other payments on time
- Amounts owed - Compares how much you owe to your credit limits with various lenders
- Length of time in file - Indicates how long you have had credit accounts
- New credit - Shows how often you are looking for new credit and how you handle accounts you have recently opened
- Type of credit - Considers the type of loans you have - car loans, lines of credit, credit card balances
*Note: Any Mortgage information that may appear in your credit report is not used to calculate your credit score.
What can you do to improve my credit score?
- Pay all of your bills on time. Paying late, or having your account sent to a collection agency has a negative impact on your credit score.
- Try not to run your balances up to your credit limit. Keeping your account balances below 75% of your available credit may also help your score.
Avoid applying for credit unless you have a genuine need for a new account. Too many inquiries in a short period of time can sometimes be interpreted as a sign that you are opening numerous credit accounts due to financial difficulties, or overextending yourself by taking on more debt than you can actually repay. A flurry of inquiries will prompt most lenders to ask you why. Dealing with a mortgage broker they only pull a credit bureau once. Dealing with a mortgage broker is a great way to shop around for the best mortgage without affecting your credit.