If you are looking to buy a home now, it pays to take a closer look at your credit score. It is sometimes called a FICO score. It is based on the data in your credit file which shows your payment patterns with regards to loans. The higher the score, the less risky you are for the banks and other lenders.
Here is a breakdown of how your credit score is calculated:
10% Types of Credit in Use
35% Payment History
30% Amounts Owed
15% Length of Credit History
10% New Credit
You can read more about how your credit is calculated here.
The subprime crisis led to tighter lending standards. This means, some borrowers may have a hard time qualifying for a loan. Meanwhile, others that qualify may not get the interest rate that they are looking for. One's credit score determines whether he will get approved for a loan. A higher score can save a borrower from high interest rates. Moreover, since a good credit score equates to low risk, a borrower can save heaps in the cost of his homeowner's insurance.
Here are links to help you understand more how credit score works and what you can do to improve it:
- How credit score works
- Five Ways to Boost your Credit Score
- 10 Ways to Improve your Credit Score
Overall, learning more about your credit rating can boost your score and save you some money. To add, practicing how to maintain a good credit score or improving it can make you more resilient to foreclosure.
If you're planning to buy anywhere in the Shenandoah Valley of Virginia, give me a call. My ultimate goal is to make my clients happy in the whole process of the real estate transaction.
I AM AT YOUR SERVICE!
Ron Stead Call me today at 540-539-1200 or e-mail at rstead@shentel.net
Find my website at http://www.ronsellsva.com/
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