If you're like many people these days, either thinking of buying Vero Beach real estate, or refinancing your current mortgage, there's a lot you have to consider before doing either one. But before you get too busy thinking about how you'll spend the money you'll save by refinancing, or what your dream home might look like, stop for a minute and make sure you'll actually qualify for a mortgage by not making these credit score mistakes.
There are dozens of factors that, well, factor into qualifying for a mortgage such as setting your limit, your rate, etc. One of the big indicators of what you'll qualify for is your credit score. This is one of the initial pieces of information a lender will use to determine if they can help you.
Your credit score is a good indicator of what kind of financing you'll be able to get. One way to start off on the wrong foot is to apply for a mortgage without having an idea of where your credit score is on the scoring scale.
Contrary to popular opinion, a soft credit pull – the kind you'd be doing if you were just checking up on your credit yourself – won't negatively impact your credit score.
It's a good rule of thumb to check your credit score on your own about once a year, but you'll want to check it a few months before you apply for a mortgage so you'll have time to build it up or make repairs if it's too low.
Check Your Credit Score
There are a lot of different companies that will generate a credit score for you. Quizzle.com is one very reliable website for checking your credit. It offers free credit reports and scores, helps you to understand what everything means and helps you build your credit.
Once you get your credit score, it's important to understand what that number means for you, and, if it's low, how to boost it. Generally speaking, 580 is the absolute lowest score you can have and still qualify for a mortgage – an FHA mortgage, specifically. Usually, you need at least a 620 to qualify. If you're at 720 or higher, you'll be in a lower mortgage rate bracket because you're thought of as a pretty worth-while risk for the lender. 780 is a great credit score and 850 is about as good as it gets.
If your credit is not so hot, there are a bunch of things you can do to get it up like pay off outstanding debts, make sure to pay all of your bills on time and consolidate debt so it's easier to pay off. Keep in mind, though, that just getting rid of credits cards won't necessarily boost your credit and could actually hurt it.
Closing a card doesn't automatically mean your credit score will go down. If you're thinking about shutting down an account, take a good hard look at your credit utilization first. Carefully evaluating your situation and knowing the numbers is the best way to get rid of unwanted credit cards without having your credit score take a plunge.
We have more mortgage tips and credit score information at our website. Just click the Vero Beach Mortgage Info link to your right under the Vero Beach Real Estate Categories.