Credit reports and scores have played a large part in many Americans\u2019 lives, but what do we really know about credit scores?\u00a0 Before the use of credit scores, it was up to lenders to decide whether a person would be granted a loan.\u00a0 This method was not always the best as lenders\u2019 own personal biases would sometimes come into play.\u00a0 In the new age of credit, factors such as age, race, and religion are not allowed to be reported to the credit bureaus, which makes for a fair playing field.<\/p>\n
Credit scores are three numbers that tell a lender the borrower\u2019s credit risk, basically can or will the borrower be likely to pay back the money.\u00a0 The three major bureaus, TransUnion, Experian, and Equifax, store data that has been collected from creditors, collection agencies, and other financial institutions.\u00a0 This information is then calculated into a score, the most common being the FICO score.\u00a0 The FICO score ranges from 300 to 850 with 850 being the best, but also almost impossible to obtain.\u00a0 The best way to increase your FICO score is to make sure you are paying your bills on time and to keep the amount you owe low.<\/p>\n
Having a good or excellent credit score is helpful when trying to apply for a mortgage.\u00a0 Here at Riverbank Finance, our loan officers will ask our clients about their credit scores to see if they qualify based on guidelines from our lenders.\u00a0 With your permission, our loan officers can immediately pull your credit from the three bureaus.\u00a0 This makes it possible for them to quickly determine whether you are preapproved for a loan or not.\u00a0 Being able to quickly pull credit helps to speed up the process.<\/p>\n
If you were not approved for a loan because of your credit score there are still some things that you can do to improve your credit score and to get your dream home.\u00a0 As stated earlier the easiest way to increase your credit score is to pay your bills on time.\u00a0 When a lender sees that a person has had a bunch of late bills and bills that are in collections it tells the lender that the borrower may not be trusted to pay back the money loaned.\u00a0 So, get those bills paid on time!<\/p>\n
Related: Buying a Home with Bad Credit<\/a><\/p>\n High credit card balances also hurt your credit score.\u00a0 To fix this, try and pay your balances off as low as possible and make sure that you are not using more than 20 percent of your available credit.\u00a0 Also make sure that you are using different types of credit accounts which can include mortgages, auto loans, student loans, and credit cards.\u00a0 The length of time that you have had credit can affect your score.\u00a0 You will want to keep the oldest line of credit that you have open and not open too many new ones.\u00a0 Finally, keep the number of hard inquiries into your credit score low!\u00a0 Although this only makes up a small percentage of your credit score every point counts!<\/p>\n At Riverbank Finance, we are able to go as low as a 580 credit score for FHA Loans<\/a>, VA Loans<\/a>, and even some\u00a0Zero Down USDA loans<\/a>.\u00a0 This is great for those still trying to increase their scores!\u00a0 For conventional loans, we are able to take a 620 credit score and higher.\u00a0 Give us a call at Riverbank Finance and see if we can help you to improve your credit score today and move you into your dream home!<\/p>\n\n <\/p> How to Improve Your Credit Scores<\/h2>\n
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What is the Minimum Credit Score Required for a Mortgage?<\/h1>\n
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