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Credit Score for Home Mortgage

Your credit score is what determines whether you qualify for a mortgage or not. The credit score is also what determines the interest rate and terms you’ll get on your mortgage. Credit scores can even affect the amount of mortgage that person can get.

A credit score is simply a number that indicates how great a risk you present to the lender. Those who have lower credit scores, usually below 600, are considered poor risks. Those with high credit scores are considered good risks.

Credit scores are compiled by the three big national credit bureaus. These agencies base the score on information reported to them by banks, credit card companies and other creditors. Negative information such as unpaid bills can cause your credit score to go down. Positive information such as a record of making payments on time can make the credit score go up.

Look at your credit score

The first move a person who is thinking about getting a mortgage should take is to look at their credit report. Anybody can get a free copy of their credit report by going to www.freecreditreport.com

Once a person has their credit report they should read it carefully. In particular you should look for false, inaccurate or fraudulent information on the credit report. This can be removed from the report if the person challenges it. Many credit reports have false information of them that can make a credit score go down.

Once a person has the credit report they should know whether they will qualify for a mortgage or not. A person with a low credit score may still get a mortgage but they will probably have to pay higher interest rates.

Don’t let lenders cause your credit score to fall

Credit bureaus will sometimes lower a credit score if there are too many inquiries about a particular individual’s credit score. This means that mortgage lenders could cause your credit score to go down by pulling your credit report too much.

A way to avoid this is to have a copy of your credit report available and give it to mortgage lenders when you apply. That way you could make a number of mortgage applications without lowering your credit score.

Your credit score may not stop you from getting a mortgage

It is still possible for a person with a low credit score to qualify for a mortgage, provided they meet other criteria. Lenders maybe willing to overlook a low credit score if a person has a verifiable source of income. This means that a person with a good job who has bad credit may still qualify for a mortgage.

An individual with bad credit may still have to pay higher interest rates or bigger payments on a mortgage.

A good suggestion is to try and raise your credit score before applying for a mortgage. Even raising your credit score by a few points can save you thousands in mortgagee interest. You can raise your credit score by getting negative information removed from your credit history.