What’s the deal with credit? Why does a loan officer care about credit? How does your credit affect your dream of homeownership? Here are the answers, and we’ll keep them short and sweet:
What it means to a lender – A credit score is a good basis of judgment on credit at a point in time. Credit history reveals trends – the pattern of spending and payments. Lenders interpret these as the probability the loan will be repaid in a timely manner. A better history translates to a more attractive loan customer.
What it means to a borrower – Different credit scores can lead to different rates and/or qualifications for different loan programs. Credit is pretty critical to the home buying process.
How can you help improve your chances for loan program qualification when it comes to credit?
There is no need to have “perfect credit” when applying for a loan, but here are some tips for enhancing credit to broaden your possibilities for homeownership:
- Make sure to monitor your credit situation
- Remove unnecessary expenses
- Utilize savings to help pay off debts
- Pay off and close multiple credit card accounts
If you have questions regarding how credit can affect your homeownership experience and when you are ready to begin the journey, please contact the Housing Buzz team!