3 Things You Must Know About A Credit Score

 

What You Should Know About a Credit Score Before Buying a Home

If you looking for a home in the Phoenix area and are planning to finance your new house, getting your credit score checked should be first on your priority list. The Reason? If you don’t have a good credit score, you may find it extremely difficult or impossible to get a mortgage.

What is Credit Score?

Needless to say, every person who has a credit card, pays utility bills or has taken out a registered debt, has a credit history. Based on how regularly a person has paid their bills or installments over a certain period of time, lenders come up with his or her credit score. This 3-digit, mathematical algorithm is designed to helps lenders judge a person’s creditworthiness and their ability to repay a loan.

How much Credit Score Do You Need?

Since 2011, most lenders have required a credit score of 640 or above for providing an FHA mortgage. However, in the past few months, lenders have begun to relax their standards a bit and many home buyers can obtain an FHA loan with a credit score of just 580.

How to Improve Your Credit Score?

The best way to do this is to always pay all of your bills on time. Another way is to dispute errors on your credit report. There are usually a few. You can dispute these errors with the three major credit reporting bureaus, Equifax, Experian and TransUnion. 

Once you find out your credit score, the next step is to meet with your Diamondback Realty agent who can help you find the best home in the Phoenix area.

- Courtesy of Diamondback Realty, www.diamondbackrealty.com

 


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