How Can I Improve My Credit Scores To Qualify For Mortgage

Advice On How Can I Improve My Credit Scores To Qualify For Mortgage

Many consumers ask how can I improve my credit scores to qualify for mortgage? There a minimum credit score requirements to qualify for mortgages and each loan program has their own credit score requirements. Here are the required credit score requirements for the following mortgage loan programs:

  • FHA requires a minimum of 580 FICO credit score to qualify for a 3.5% down payment home purchase FHA insured mortgage loan
  • Borrowers can qualify for FHA Loans with credit scores between 500 and 579 with 10% down payment
  • VA requires a minimum of 580 FICO credit score to qualify on both VA home purchase and VA home refinance loans
  • USDA requires a minimum of 580 FICO credit scores to qualify for USDA Loans
  • Minimum Credit Scores for FHA 203k Loans is 620 FICO
  • Minimum Credit Scores required for Jumbo Mortgages is 680 FICO
  • Minimum Credit Scores required for 5 to 10 Fannie Mae Financed Properties is 720

Affects Of Credit Scores In Qualifying For Mortgages

Low credit scores means higher mortgage interest rates which means it costs borrowers more money when it comes time for them to secure a mortgage.  Lenders penalize borrowers with low credit scores because lower credit scores means higher risk borrowers. Many times, it is worthwhile to wait until the applicant have repaired their credit scores before applying for a mortgage.  Borrowers should always work with a mortgage broker or mortgage banker who they feel comfortable with and someone who will act on their best interest.  A mortgage broker should give borrowers various options that would be most beneficial for them  I, for example, advise my clients that they can qualify for a lower interest rate if they can get their scores up, if that is the case. Ways on how I can improve my credit scores to qualify for mortgage may be just by paying down their credit cards. The Gustan Cho Team at Nationwide Mortgage & Realty LLC assists folks in assisting them boost their credit scores.  Borrowers who just got their credit scores plummet due to a recent bankruptcy or foreclosure should start repairing and reestablishing their credit as soon as possible.

Credit Scoring Models

Credit scoring models are complex and often vary among creditors and for different types of credit.

  • If one factor changes, one’s credit score may change
  • Improvements of credit scores usually is dependent upon one factor or another taken into the credit scoring model formula by each credit bureau
  • Only the credit bureau can explain what might improve a consumer’s credit score under the particular model used .

Nevertheless, scoring models generally evaluate the following types of information in your credit report:

Here are some factors on how I can improve my credit scores to qualify for mortgage:

  • Paying bills on time
  • Overall payment history of consumers is an important factor in the credit scoring model
  • Late payments will negatively impact borrower’s credit scores
  • Collections accounts, charge offs, and late payments will drop consumer credit scores, however, scores will improve as the derogatory credit tradeline ages
  • Large balances on revolving accounts will negatively impact consumer scores
  • Higher balances will hurt consumers
  • Paying down revolving accounts will greatly boost scores
  • Longevity of your history with a creditor shows strength and stability
  • Lack of credit will hurt consumers
  • Mulitple inquiries is not good and hurt consumers and lenders view multiple inquiries as not favorable
  • The amount, age, and type of accounts consumers have determines their scores

If you have any questions, please contact me at The Gustan Cho Team at Nationwide Mortgage & Realty.  There is no obligation or cost involved. Even if you have just filed bankruptcy and are not ready to buy a home until a later date, contact me and lets work together in rebuilding your credit.  If you have low credit scores and see if you qualify for a mortgage click APPLY NOW FOR PRE-APPROVAL or call me at 262-878-1965 or text me on my cell at 262-716-8151 for faster response. We are available 7 days a week. You can email us at gcho@gustancho.com.

 Gustan L. Cho NMLS ID 873293

This BLOG On How Can I Improve My Credit Scores To Qualify For Mortgage was updated on March 16, 2017 by Gustan Cho NMLS 873293 of Nationwide Mortgage & Realty LLC.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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