We hear it all the time: "Make sure you have a good credit score, or else you'll never get a loan!". But what is a good score and how can we improve it?
With the tough economic conditions that we have been through during the last 5-6 years, with job cuts and the slow economic growth, many have found themselves in tough situations. It sometimes doesn't take much to push people over the edge into having no choice but to file for personal bankruptcy. Could have been an unforeseen medical emergency, a job loss or taking care of a loved one. Whatever the cause, if you have had to go through a bankruptcy, you know that depending on which kind of mortgage you would be interested in, the wait is anywhere from 2 to 7 years before you can apply for a loan.
Most lenders can offer mortgages to buyers with credit scores starting at 620. What affects that credit score? Student loans, car loan, unpaid credit card debts are just a few of the factors that affect your credit score. How can you improve it? Consolidate your debt and start paying it off! Pick whichever has the highest interest rate and pay that off the fastest. Scary fact: if you are only making the minimal payments on a 5000$ credit card balance, it will take you almost TEN years to pay it off! And that 5000$ will have cost you almost 8000$.
Something to think about. Maybe our mothers were right all along by telling us to not live beyond our means...
If you would like the discuss how to better your credit score in order to be able to get a pre-approval for a house loan, give me a call or email me. We have a great in-house lender who can get you a pre-approval with no charge or obligation.
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