This Article Is About Secured Credit Cards To Improve Scores To Qualify For Mortgage:
Consumers need to realize credit scores fluctuate up and down. Just because someone has lower credit scores does not mean the scores will remain low. The team at Gustan Cho Associates has helped thousands of consumers rebuild and increase their credit scores so they can qualify for a mortgage. We have also helped our clients maximize their credit scores so they can get the best mortgage rates. One of our specialties is helping people who have recently got their bankruptcy discharged rebuild and reestablish their credit.
The team at Gustan Cho Associates are experts in helping future mortgage borrowers increase their credit scores to over 700 FICO in less than one year after bankruptcy discharge.
The Importance Of Timely Payments In The Past 12 Months
It is not rocket science in boosting and rebuilding your credit scores after bankruptcy, foreclosure, or a period of bad credit. The best advice we can give our viewers with bad credit is never to be late on any monthly payments after bankruptcy, foreclosure, or period of bad credit. Start rebuilding and re-establishing your credit by adding positive credit. Pay the monthly payments religiously.
Everyone should sign up for monthly automatic payments online so you do not miss any payments. Make sure if you have annual fees on credit cards that you pay them religiously. You should sign up for a credit monitoring service and go over every creditor every month to make sure they have gotten their minimum monthly payments. Secured credit cards are the easiest and fastest way to rebuild and re-establish your credit and increase your credit scores.
Preparing To Qualify For A Mortgage By Rebuilding And Re-Establishing Your Credit
Borrowers who are planning on getting a purchase mortgage loan or a refinance mortgage loan with prior bad credit can now qualify for home loans. Mortgage loan applicants with prior bankruptcy, foreclosure, or charge-offs and low credit scores can improve and boost their credit scores with secured credit cards. You do not have to pay outstanding collections or charged-off accounts to qualify for a mortgage.
Borrowers can have prior bad credit and lower credit scores and qualify for a mortgage. However, the key is PRIOR. Mortgage lenders want to see borrowers have been timely on all of their monthly payments for the past 12 months. No late payments after bankruptcy, foreclosure, or period of bad credit. You do not have to hire expensive credit repair companies to delete older bad credit, late payments, public records, collections, and charged-off accounts. Older derogatory credit tradelines normally do not have a great impact on your credit scores. Concentrate on rebuilding and re-establishing your credit by getting three to five secured credit cards.
Depending on how low credit scores are, a secured credit card can boost credit scores by 20 points to 50 points. The ideal amount of secured credit cards to have is 3 secured credit cards with at least $500 credit limits. Three secured credit cards can boost credit scores by 100 points or more in many cases.
In this article, we will cover and discuss the use of Secured Cards To Improve Scores To Qualify For Mortgage.
Why Secured Credit Cards?
Why secured credit cards?
The reason being is that it is pretty difficult to get an unsecured credit card with bad credit. Most unsecured credit card companies will require that credit scores be at least 700 FICO or higher. Consumers would eventually want to get unsecured credit cards. But the best ticket for an unsecured credit card approval is via the secured card means.
Optimizing Credit Scores With Secured Cards
Why three secured cards?
- The first credit card with boost credit scores by 20 to 50 points
- The second secured credit card will probably boost it by 15 to 30 points
- The third secured card will probably boost credit scores by 10 to 20 points
- The fourth or fifth secured card will probably have a 5 to 10 point boost if that
Three secured credit cards are the magic number. It is highly recommended people have a mixture of credit. Besides credit cards, other forms of credit will boost your credit scores and strengthen your overall credit profile. Please go to the home page of Gustan Cho Associates and scroll down the RESOUCES section at the bottom of the footer to explore getting other creditors added to your credit profile for maximum potential.
How Many Secured Cards Should I Get?
I strongly recommend that you get a $500 credit limit or higher credit card and use it periodically but never pay the balance to zero. Always leave a $10 dollar balance on all credit cards. The way to optimize the maximum effect on each credit card is by having an available balance factor.
For example, a $1,000 credit limit credit card and had a balance of $900, the factor is 0.90. This available balance factor is derived by dividing the $900 credit card balance by the $1,000 credit limit. However, if the credit card balance is only $100, then the factor is 0.10. The credit balance of $900 divided by the credit limit of $1,000, yields the 0.10 factor.
The lower the factor, the higher the credit score. However, if there was a zero balance, the factor will be zero. Anything divided into zero yields a zero.
There needs to be a number. The smaller the better, as a factor to optimize credit score.
What Cards Are Recommended?
Consumers can search on Google for secured cards. Make sure that the secured card company report payment history to all three credit reporting agencies; Transunion, Equifax, and Experian. Three secured cards with $500 credit limits are the key to having great credit and re-establishing credit to qualify for mortgages.
For more information about this article and/or other mortgage-related topics, please contact us at Gustan Cho Associates at 262-716-8161 or text us for a faster response. Or email us at firstname.lastname@example.org. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays. Gustan Cho Associates is a five-star national mortgage company licensed in multiple states with no lender overlays on government and conventional loans.
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July 28, 2021 - 5 min read