The credit situation for each person looking to purchase a home is unique. Let’s look at the basics of attaining and maintaining high credit scores.
If your credit needs further attention than what it would currently take to purchase a home, if needed, we can tap into other resources that may be able to help get you to that point. The first thing, and this can’t be overstated, is to start as early in the process as you are able to. This may mean when you are just thinking about purchasing a home.
The first thing to keep in mind is to pay your bills on time. This sounds overly basic, but it needs to be said. Lenders look for patterns in your ability to pay your monthly obligations on time, including rent payments, car payments, credit cards, etc. Late payments, especially recent ones, will drive down your credit scores.
The second thing to keep in mind is that even if you are paying your bills on time, you want to show lenders that you are living within your means. Credit scores favor those borrowers who have low debt and specifically low balance-to-limit ratios on credit cards. Maxed-out credit cards, especially multiple cards, will lower your credit scores.
Credit scores will adjust as these balances are paid off, but, as stated above, this may take time, and knowing what needs to be done earlier rather than later will make the process go more smoothly.
I am here to help you get into a buy-ready position, and if you have more questions about credit within the mortgage process, I am only an email or a phone call away. I would be happy to go over the options and help you determine what is right for you and your circumstances.