Credit score is one among the factors all mortgage lenders use to determine if a person is qualified for financing. Every lender and creditor uses various methods for determining the credit worthiness. In some cases, it is difficult for minimum score to determine for obtaining conventional loans. There are other cases in which there are minimum scores people should have to get qualified for getting loans. The credit score the lender will agree for sanctioning conventional loans is determined by several factors such as payment history, current wage, salary history and available credit. People who are thinking to buy a new house should be aware that their credit score can affect the ability to get home mortgage. Even a poor credit can affect the loan amount and interest rate. Even it can affect the type of loan they can get. It is very important to know the minimum credit score a person must have for buying a house.
What you must do
- People have to understand that different lenders have set different credit lines. The minimum credit score requested by the lenders may vary based on several factors. Some of the common factors that decide the minimum credit score for buying a new home include credit history, monthly debt payments and income.
- There will be a predetermined credit score that can ensure you can obtain a home mortgage. It is better to get a copy of the credit report early. This will let people know about what the lenders will see on their credit record.
- Consumers can obtain a credit report every year for free at annual credit report. The credit score is simply a number that summarizes a person’s credit report. It is not included in the free credit report.
- Consumers can obtain credit reports from three main free credit reports. The range of the credit score is between 300 and 850. If you have a higher credit score, you can have more options to obtain a home mortgage. People have to keep in mind that these three free credit reports use different methods to calculate the credit score. So, the three credit scores may slightly differ.
Consumers can contact a mortgage professional to get help in the process of obtaining the mortgage loan. The professional can guide people through prequalification. This will give them an estimation of the mortgage amount depending on the information they have given. If you lack the minimum credit score to buy a home, you can ask the mortgage professional some tips to improve your credit score. You have to follow the tips on monthly basis to get the score increased. You have to make sure all the bills are paid with no delay. It is very important because late payments can decrease the score. Next pay down the credit balances as maximum credit accounts can hurt the score. It is also best to check the credit report on regular basis to avoid errors. These are the ways people can follow to raise their credit score and become eligible for getting home mortgage.