Video: 6 Ways to Improve Your Credit
It’s very important to get your credit in shape before starting the home-buying process. Your credit scores indicates your ability to repay debts. They are also a fundamental requirement for mortgage lenders.
Your credit scores can also play a role in what it costs to borrow money. The higher your credit score, the more likely you are to get a good interest rate.
When your lender runs your credit report, it will generally show three scores, one from each of the major credit-reporting agencies: Equifax, Experian, and TransUnion. Your lender will use the median, or middle, score for the purposes of getting a home loan pre-approval.
Credit score requirements aren’t as tough as they once were. But it can still be challenging for borrowers to secure financing. Conventional lenders often require a minimum 660 FICO score, but in order to access better interest rates, you will usually need to have a much higher score.
VA Lenders usually accept a lower score, often around a 620 FICO. Additionally, credit scores have less impact on interest rates for government-backed loans.
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