How Your Credit Score Affects Buying a Home in Fort Worth Texas
Your credit score is calculated with a formula used by lenders to predict their risk when they give you a loan as a borrower. If you are planning on buying a home in Fort Worth Texas, your credit score is the most important factor in determining whether they will give you a home loan or not and at what interest rate.
A good credit score can help you qualify to buy a home in Fort Worth, Texas so it’s important to know what makes up your credit score so you can maintain it at la level that will qualify you for a home loan.
5 Things That Make Up Your Credit Score
Payment History – 35%
This includes your account payment information, including any late payments and public records. your payment history makes up the bulk of your credit score. This means delinquencies and late payments have the greatest impact on YOUR overall credit score and could even prevent you from buying a home in Fort Worth, Texas.
Total Amounts Owed – 30%
This includes how much you owe on any and all of your accounts. Lenders heavily consider the amount of available credit you use on revolving accounts.
Length of credit history -15%
Amount of time since you opened accounts and the time since your account activity.
Types of credit used - 10%
Types of credit you use such as revolving and installment.
New credit -10%
This includes your credit inquiries, pursuit of new credit and number of recently opened accounts.
Take note that personal or demographic information such as race, age, marital status, employment, and income do not affect your credit score.
How to check your credit score
The 3 major credit reporting bureaus are mandated by federal law to provide you with a free credit report annually, but not to a free credit score. You can use your FICO score estimator to get your score range for free. To get the number of your exact credit score, you have to purchase it from one of the credit reporting agencies or a score provider.
Ways to Improve Your Credit Score
If you want to get a home loan for buying a home in Fort Worth TX you must first improve your credit score or make sure it is at the acceptable ranges.
Here are some ways you can improve your credit score:
- Pay off your credit card balances and other debts on time.
- Limit your outstanding debt.
- Limit inquiries for new credit.
- Avoid canceling your lines of credit.
- Request your bank to increase your credit limits.
Knowing what makes up your credit score and how to improve it will significantly increase your chances of buying a home in Fort Worth, TX.
For more information on how to buy a home in Fort Worth, Texas, call me, Donnie Keller, 24/7 at 817-932-4900.