Porcupine Real Estate


Posted by Mark Warden on 4/12/2018

Your credit score is a 3 digit number that can have a huge impact on many things that you hope to accomplish in your life. One of the biggest reasons that you need a good credit score is for buying a home. As many people rely on credit cards to fund their expenses, they consequently end up in debt. This doesnít have a favorable impact on credit scores. Yet, itís so important to maintain good credit.


Why The Score Is Important


A credit score is one of the most crucial factors in determining if you can qualify for a mortgage. It is an overall gauge for lenders to understand how financially responsible you are. The higher your credit score, the less risk you carry in the eyes of lenders.


What Affects A Credit Score?


Your credit score is calculated based on information that is found on your credit report. There are five different things that affect your credit score, each with a slightly different impact:


  • Payment history
  • Debt-to-credit utilization
  • Length of credit history
  • Credit mix
  • New credit


Whatís A Good Score?


Absolutely flawless credit is 850. Donít worry if youíre not in that category. Only about 1/2 of one percent of consumers actually have a score this high. Once your score reaches 740 and above, youíre able to qualify for the best in mortgage rates. Even if your score is in the low 700ís, you still should be able to qualify for a good interest rate. For a conventional loan, many lenders look for a credit score of 620 and above. Being in the high 600s will help you to avoid the need for additional paperwork. Youíll also get a decent interest rate with this score.


What If You Donít Have Credit History?


Ideally, you would have opened some type of a credit card by the time you reached the age of 20. This would help to establish credit. If you donít have any type of credit history, there are still a few ways that you can qualify for a mortgage. In these cases, lenders will often use alternative sources in order to determine the reliability of a party theyíre lending to. For example, your car payment history doesnít show up on your credit report, but a good track record helps lenders to see that youíre dependable and a responsible credit user.


What About Bad Credit?


From missed payments to errors on your credit report, there could always be some problems with a credit score. The good news is that bad credit can be fixed. There are even loan programs designed to help people with less than perfect credit scores. Generally FHA (Federal Housing Administration) loans and VA loans allow for low down payments and have lenient credit score requirement.


Fixing Your Credit Score Is Fixing Your Habits


In order to repair your credit score, youíre going to need to fix the bad financial habits that got you into the situation in the first place. This means making on-time payments, spending less, and avoiding opening up any new accounts. Pay down your existing debt and try to make a fresh start form there. Also, be sure that you obtain a free copy of your credit report each year to keep on top of any errors that might be present on the report.





Posted by Mark Warden on 1/5/2017

If you have seen your latest credit score and feel like youíre less than financially fit, donít fret. Thereís plenty of reasons why people end up with bad credit. Thereís also plenty of things that you can do to amend and work with your bad credit.

The Factors

Mortgage lenders look at a variety of factors when it comes to your credit and determining if youíre ready for a home loan. These include:

  • Age of credit
  • Payment history
  • Amount of credit debt

If you have opened new accounts frequently or ran up credit card balances without paying them down, these behaviors could negatively affect your credit score.

Changing Your Habits

Just changing one of these bad habits can help your credit score in a positive way. This also means that a bad credit score doesnít equal not being able to get a home loan. Your home loan may just come at a higher price.

What If Youíre Turned Down For A Loan?

You can ask your lender why youíre unable to get a loan. Some possible reasons that youíre getting rejected:

  • Missed credit card payments
  • Failure to pay a loan
  • Bankruptcy
  • Overdue taxes
  • Seeking a loan outside of what you can afford
  • Legal judgements
  • Collection agencies

If you have defaulted on a loan, missed payments or filed for bankruptcy, chances are that youíll have trouble securing a home loan. Other factors that can affect your credit score include negative legal judgements that have affected your credit, or having a collection agency after you.

How To Fix It

If you have bad credit, itís not the end of the world. Itís possible that lenders can give you a loan if your credit score isnít too low. You could, however, face higher interest rates as a penalty for a low credit score. This is due to the fact that youíre more likely to default on a loan based on your risk factors.

You can improve your credit score by:

- Keeping existing accounts open

- Refraining from opening new accounts

- Trying not to approach too many lenders to find the right interest rate. Every time you get a credit check, it affects your score.

Finding A Loan

Signs of bad credit can take awhile to disappear from your credit report. Sometimes, you have the opportunity to explain to lenders what these factors are in detail so you can secure the loan.†

FHA Loans

FHA loans are a great program option especially for people with bad credit. These loans offer low down payment options and have lower credit score standards. FHA loans have been helping people to secure their first homes since 1934.

If you have bad credit, the dream of home ownership is still possible. If youíre early in the process, get to work and keep that credit score up so that when you head out to apply for a loan, youíll be able to secure it.††




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