When looking into getting a new home or making that big purchase for your next home, two big players that come to the court are your credit score and your credit report.
For those that may be newer to the process or looking to apply for your first mortgage, you may be wondering “What is the difference?” Your credit report is the full listing of your credit history, accounts and transactions. Your credit score is the numerical calculation based off of the history shown on your credit report.
No credit on a credit report can lead to a lower score. Lenders like to see a history of fiscal responsibility. Higher credit scores show that you have a good history in regards to credit and financial responsibility. This includes the payment of loans and making payments on time. The higher your credit score the more likely your ability will be to get lower interest rates on your mortgage loan.
When looking at applying for a mortgage, take a look at your credit history first. You can get this report via free online tools such as creditkarma.com. You can also sit down with your bank and go over the report with a financial advisor. They will be able to help you look at your options and see places where you may be able to improve areas of your credit report before applying for a loan.
Also be sure to look at the other factors that can influence your ability to get a mortgage such as your current income, total assets and savings accounts. Remember that applying for a lot of new credit close to the time of applying for a loan can be looked down upon by financial agencies.
Take a look at all of these areas and discuss them with your financial advisor, bank or lending group before applying for your mortgage. That way you will be prepared and be able to find the best way to utilize your credit towards a mortgage that works for you.
Optimize your home buying power, no matter what your credit score; give our team at Puck Realty a call at 919-842-5900 and let us put our years of experience to work for you!