Quick Credit Score Fixes To Qualify For Mortgage Loans

Gustan Cho Associates are mortgage brokers licensed in 48 states

This article covers Quick Credit Score Fixes To Qualify For Mortgage Loans

Every mortgage loan program has a minimum credit score requirement.

  • However, even though a mortgage borrower meets the minimum credit score requirements, they should try to get their credit scores as high as possible prior to applying for a mortgage
  • The higher the credit scores, the lower the mortgage interest rates

Mortgage Guidelines On Credit Scores

What are the mortgage guidelines for credit scores

Here are the minimum credit score mortgage guidelines:

  • HUD requires a 580 minimum credit score for 3.5% down payment home purchase loans
  • VA has no credit score requirements
  • However, veteran borrowers should have at least a 580 credit score to get an approve/eligible per Automated Underwriting System
  • Fannie Mae and Freddie Mac have a 620 minimum credit score requirement for Conventional Loans
  • USDA requires a 580 credit score
  • Jumbo Lenders normally require a 700 credit score
  • 95% Loan To Value Jumbo Mortgages(10% down payment on Jumbo Home Purchase) requires a 720 credit score
  • Condotel and/or Non-Warrantable condominium lenders require a 680 credit score

The above are the bare minimum credit score requirements. Most lenders will have lender overlays on credit score requirements which may be substantially higher than the scores listed above. Gustan Cho Associates has no lender overlays on government and/or conventional loans. We just go off the above minimum credit score mortgage guidelines.

Income And Credit Mortgage Guidelines

Income and credit scores are the most important factors in getting residential mortgage loan approval.

  • Having a low credit score can be detrimental in getting a mortgage loan approval
  • There are Quick Credit Score Fixes To Qualify For Mortgage that does not take a long time
  • For example, borrowers who want to qualify for a 3.5% mortgage loan, the minimum credit score required is 580 with FHA Loans
  • Borrowers who have a 579 FICO credit score or under can still qualify for FHA Loans
  • However, borrowers whose credit scores below 579 need to put 10% down payment under HUD Guidelines
  • Homebuyers with credit scores are between 500 and 579 need a 10% down payment is required and an approve/eligible per Automated Underwriting System Finds for FHA Loans

The good news is that there are Quick Credit Score Fixes To Qualify For Mortgage and can be raised easily by implementing a few quick fixes.

Quick Credit Score Fixes To Qualify For Mortgage And Boost Credit Score Instantly

How to make quick credit score adjustments to qualify for a mortgage and instantly increase your credit score

Home Buyers who have multiple credit cards with high credit balances, credit scores can easily be improved by paying down the existing credit card balances.

  • For example, a home buyer has 3 credit cards with $500 credit limits
  • The homebuyer has credit balances over $450 on each of the three credit cards
  • By paying down the credit card balances will boost credit scores by 50 or more points depending on the consumer credit profile
  • The available credit limit is a huge factor in calculating credit scores
  • Mortgage borrowers who have credit scores below 580, the first thing to check is the borrower’s credit balances compared to their credit limit
  • I advise them to pay off their credit cards and just leave a $10 dollar balance on it

This tip on Quick Credit Score Fixes To Qualify For Mortgage works 100%.

Secured Credit Cards For Borrowers With Bad Credit Can Boost Credit Scores Instantly

There are many cases where mortgage loan borrowers have had prior bad credit, no credit, or not enough credit and that is the reason they have low credit scores.  One of the quickest fixes in situations like this is for the mortgage loan borrower to get one or two secured credit cards.

  • Adding a secured credit card for those folks with no credit or not enough credit can easily boost their credit scores by at least 20 or more points
  • I strongly recommend at least a $500 credit limit secured credit card
  • Borrowers who need to super-boost credit scores should get three $500 credit limit secured credit cards
  • By doing so credit scores will increase instantly and they can improve as much as 70 or more points depending on the individual situation
  • Do not max out credit cards  
  • Do not have credit balances over 30% of the available credit limit

As time progresses and credit cards are seasoned and credit scores will improve as it ages.

Quick Credit Score Fixes To Qualify For Mortgage: Never Leave Zero Balance

What are the quick credit score adjustments to qualify for a mortgage

Credit Cards are the best, easiest, and fastest Quick Credit Score Fixes To Qualify For Mortgage. To optimize credit scores, always leave a small balance on credit cards.

Here is the reason why low credit card balances optimize credit scores:

  • Maxed out credit cards will plummet credit scores
  • The drop in credit scores is temporary and credit scores will increase the next update period once balances are paid down 
  • For maximum optimization on credit scores, have credit card balances no higher than 10% of the available credit limit
  • The way credit bureaus calculate credit scores is by taking credit card balances and dividing it by the available credit limit which results in a number
  • That number is the factor and the smaller the factor the higher the consumer’s credit scores
  • However, if the balance is zero, any credit limit dividing into zero will yield zero which is not good
  • There always needs to be a factor

So this is why consumers need to leave a very small balance on their credit cards when using these quick credit score fixes to qualify for a mortgage.

Adding As Authorized User On A Credit Card

Adding one to another person’s credit card as an authorized borrower will work only if the following applies:

  • Spouse with the same last name living at the same address
  • Relative and/or Family member with same last name living at a different address
  • Relative and/or Family member with different last name and living at a different address

The main user of the credit card needs to have a perfect payment history and a very low balance on their credit card balance.  If a borrower is already added on as an authorized user but the main user has late payments and/or maxed out credit card balances, this will plummet the authorized user’s credit scores. Have the main user remove you as an authorized user. This will increase credit scores.

Related> Home Loan With Bad Credit

Related> Mortgage Loan With Bad Credit

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