When it comes to obtaining a home mortgage, your credit score is an incredibly important component.
If your score is too low, you may not be eligible for a mortgage loan at all. Furthermore, if your credit score is less than ideal, then you could end up with a higher interest rate, which on a debt as large as a home mortgage, can be very costly in the long term.
There are many factors that go into creating the final number that your credit score reads at any moment in time, including payment history, number of open accounts, age of accounts, types of accounts, the appearance of derogatory accounts such as judgements and collections.
Many of these items that are negatively affecting your credit score can only be negated by waiting for these past negative events to become older in age on your credit report.
However, there is one single way to improve your credit score quickly within 30 days time. If you have any revolving credit accounts (credit cards), which have a balance of over 30% of their limits on the card, pay them down to 30% immediately.
For instance, if you have a credit card that has a credit limit of $1,000 and it has a $500 balance on it, that balance is affecting your credit score, as the percentage of revolving credit utilized is another factor that affects your credit score.
If you were to pay that balance down to at least $300 and wait a month, when your credit score is updated you will normally see an immediate increase in your credit score.
How much your score increases depends on how close to the limit of the card you were previously and the number of revolving accounts with balances you may have. However, this is often time the single quickest way to raise a person’s credit score, if they have any credit cards with balances over 30% of their limit.
As always, everyone’s situation is unique and to properly look into your specific situation, make sure and consult with a licensed local lender such as Strategic Mortgage.
For more information on current home loan programs and options for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: info@strategicmtgaz.com or online at www.strategicmtgaz.com
Strategic Mortgage, LLC – AZBK#0909514 - NMLS#158804 - Equal Housing Lender
Vasilios Kamboukos – NMLS#160440
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