As the housing market heats up with summer approaching and more consumers considering buying a home, it’s important to consider the role that your credit score plays in your ability to secure a mortgage.
Conventional mortgage lenders will typically want a credit score around 700s, but those with a scores on the 500s -600s may still qualify for a loan, your lender or loan officer will able to put you on the right program.
Below are some steps you can take to prepare your credit before applying for a mortgage:
- Review your credit report card
- Dispute any inaccuracies- Credit Recovery Group is here to help this process less of a headache.
- Make sure you have several tradelines- Conventional loans require at least three tradelines that have been active within the past 12-24 months. This includes any combination of credit cards, student loans, car loans, etc.
- Leave older credit lines open- Older, more mature tradelines help boost your credit score, so leave those credit cards open even if you don’t use them all the time.
- Avoid opening new credit lines
- Stop Buying on credit- Purchasing new furniture and appliances for your new home could jeopardize your approval process. It is best to wait until your loan finalizes before purchasing anything on new credit.
- Avoid shuffling money around from bank account to bank account- doing this makes paperwork less hassle.