Today we’re going to talk about an essential aspect of getting a mortgage, and that’s understanding your credit scores. Your credit score is a three digit number that ranges from 300 to 850. And it’s like a financial report card that lenders use to determine your credit worthiness. A higher credit score can really be a game changer when applying for a mortgage.
It can lead to, number one, lower interest rates, which means you’re going to be paying less over time. And on the other hand, a lower credit score might make it a little more challenging to qualify for a mortgage. And you might also end up with a higher interest rate. So what affects your credit score? There are several factors that come into play, including your payment history, credit utilization, length of your credit history, and also the types of credit that you have.
Paying your bills on time shows the lenders that you’re reliable. Higher credit card balances can hurt your score, so keep your credit utilization low. Having a longer credit history can also be beneficial as it demonstrates your financial responsibility over time.
