Why Opening New Credit Cards Raise Scores And Help For Mortgage
- The global coronavirus pandemic has impacted the stock market, real estate and mortgage industries, and the economy
- However, Americans still need shelter. In many instances, buying a home is cheaper than renting
- Mortgage rates are at record all-time lows
- You do not need a 20% down payment to qualify for a mortgage. USDA and VA loans do not require any down payment requirements and offer 100% financing
- FHA loans only require a 3.5% down payment on a home purchase
- Conventional loans require a 3% to 5% down payment
- Non-QM loans require 10% to 20% down payment
- One of the most important factors when qualifying for a mortgage is the borrower’s credit scores
- Credit scores determine the amount of down payment a homebuyer needs to put down
- Credit scores determine the mortgage rates
- Higher credit score borrowers are less riskier borrowers under the lender’s eyes
- Borrowers can easily get 700 plus credit scores after a bankruptcy as soon as six months after their bankruptcy discharge
Why Opening New Credit Cards Raise Scores And Is Fastest Way Of Rebuilding Credit
Homebuyers can qualify for a mortgage after bankruptcy.
- However, they need to meet the minimum credit score requirements
- Consumers should start rebuilding credit after a bankruptcy as soon as possible after their discharge
- Getting secured credit cards is the easiest and fastest way of rebuilding credit after bankruptcy. Many often give up on getting credit after bankruptcy
- They often feel there is no way in rebuilding credit after bankruptcy on their credit reports
- Many often feel credit cards got them into trouble in the first place and cash is the best policy
- Not rebuilding credit and getting new credit will often hurt consumers
- The reason why not having credit hurts consumers is because it suppresses your credit score
- The ideal amount of secured credit cards to get after bankruptcy is three
- The minimum credit limit to get is $500 limit on each card
- Secured credit cards are just like traditional unsecured credit cards except you need to place a deposit to the credit card company
- The amount of deposit you put down is the credit limit the company gives you
- With timely payments on your new secured credit cards, many companies will often increase your credit limit without asking for an additional deposit
See http://www.720creditscore.com/help/credit-cards/ for secured and/or unsecured credit card recommendations for bad credit, good credit, or excellent credit.
Importance Why Opening New Credit Cards Raise Scores And Reestablish Credit
Alex Carlucci of Gustan Cho Associates is a credit expert. Alex has helped countless of mortgage borrowers with bad credit re-establish their credit so they can qualify for a mortgage. Here is some important advice Alex Carlucci gives his client:
The credit-scoring bureaus place more emphasis on recent behavior than on past behavior. This means that if you have suffered from some sort of financial meltdown that caused your credit score to drop, your credit score will be bad in the months after the financial problems, but it will start to increase as the negative marks begin fading into the past. But, this assumes that you have given the credit bureaus new and improved information about your payment and spending habits. Think of it like this: Rewind to your years in high school and imagine that you failed a test when you were a sophomore. When you failed the test, your parents and your teacher were probably disappointed in your effort and test score. Now imagine that for the rest of your sophomore year, as well as your entire junior year, you had great test scores. By the time your senior year rolls around, your parents might not have forgotten about your failed test entirely, but they probably are not too concerned about that “F” that you received two years prior. The same goes for credit. If you take the right steps, all of those “F” marks will not matter in 12 to 24 months—after all, you will have a new and improved history of earning “A” after “A.” This is why you need to have and use credit if you want to have a good credit score.
Importance Of Establishing New Credit Tradelines When Qualifying For A Mortgage
Lenders will look at the past payment history of a borrower. Credit bureaus will derive to a consumer credit score by analyzing the type of credit, the payment pattern, utilization ratio, the longevity of the tradeline, and the ratio of timely versus late payments. The lower the credit utilization ratio, the higher the scores. The more diversified the consumer is with the types of credit they have, the higher the credit score. The longer the credit tradeline, the higher the credit score. The best way to have the highest credit score possible after bankruptcy is to get three major revolving credit cards.
Massimo Ressa of Gustan Cho Associates is another credit expert. Massimo said the following:
Unfortunately, it can be hard to qualify for credit cards if your credit score is low. And beyond that, according to a Federal Reserve Board study, 46% of credit cards will hurt your credit score. About half of the credit cards that people carry in their wallets do not report to all three credit bureaus, or they do not report the proper credit limit, which causes your score to drop. To help our clients and readers improve their scores the fastest, we have identified the best credit cards that do report the proper credit limit to all three credit bureaus. Lastly, keep this in mind: Every time you apply for credit, your score might drop a little. But after about six months of timely payments on these new credit cards, your score will show significant improvements. And six months later, you might have a great credit score, which will allow you to renegotiate your car loan, home loan, and credit card terms, which could save you hundreds of dollars each and every month!
Gustan Cho Associates Mortgage Group are experts in helping borrowers with maximizing their credit scores so they can qualify for a mortgage. GCA Mortgage Group is a five-star national mortgage company licensed in multiple states. We are the to-go lender for homebuyers who had a prior bankruptcy, foreclosure, deed in lieu of foreclosure, short sale and/or other derogatory credit. Please contact us at 262-716-8151 or text us for a faster response. Or email us at email@example.com.