WAYS TO ESTABLISH GOOD CREDIT HISTORY SCORE: Part-1
Having a good credit history score is good, no matter what is your financial goal, but the very first step of mortgage home loan is credit history score. When you will apply for the mortgage with the loan application, your lender will look after some factors. The credit score is one of the important factors which your lender will check to approve the mortgage home loan.
The credit score is single number made up of all your credit history. It is also known as FICO® credit score. While giving an approval, credit history score will help your lender to determine your creditworthiness. This is same for other loans which everyone generally required like the car loan, credit card and many more. The factors on which credit score is based upon:
- Payment history – 35%
- Debts owed – 30%
- Length of credit history – 15%
- New credit accounts opened – 10%
- Healthy mix of credit (credit cards, loans, etc.) – 10%
WHY GOOD CREDIT HISTORY SCORE MATTERS
Buying a home is not just about choosing a perfect home for your future. You have to be prepared for the biggest investments you will make throughout your life. When you will apply for a home loan, your lender will check few details to ensure you can afford the monthly installments or not. If you have the good credit score, then your lender will happily approve your home loan. If you have bad credit score then it will be difficult for you, but that doesn’t mean it is impossible, you can improve your credit history score easily.
HOW TO ESTABLISH GOOD CREDIT
There are many ways to build a good credit score, but it will take the time it can’t happen overnight. You can start building your credit whenever you will feel like because it’s never too early to start as the sooner you will do, it will easy for you to buy a home. In this article, we will discuss some methods for building a strong credit history score.
CHECK YOUR CREDIT HISTORY SCORE
The first thing you should know is your credit score. You can check your credit history score at annualcreditreport.com. You can also check with bureaus like TransUnion, Experian, and Equifax. The credit report will also show the errors which are listed. And if you want to improve your credit score, it is good that you have the errors on which you have to work.
MAINTAIN LOW CREDIT BALANCES
While it’s good to have open lines of credit, you want to be mindful of the debt balance you’re carrying. If at all possible, it’s best to pay off your credit card balances in full each month.
You can maintain low credit balance by maintaining your debt balances. You can pay off your credit card balances in full each month, this will lead to maintaining a low debt-to-income ratio as you are very responsible for utilizing your credit lines. The lender will check your debt-to-income ratio and they will only approve when you have less than 43%. If you will maintain a low credit card balance, it will help you to build your credit score.
PAY MORE THAN THE MINIMUM
While paying off the credit cards they have the minimum amount which you can pay off monthly, but if you want to make a large payment then it will give importance to your creditworthiness. It means that you will chip away at your debt balances very quick and you will end up paying off with less interest over time.
By following all these steps, you will be on a right track to build your credit history score or to improve your credit score. In the next article, we will discuss more steps. If you will need any help, you can contact us at (818) 322-5626. We know that sometimes people have a harder time getting a home loan. That’s why we offer multiple different alternative financing options. You have to be careful and avoid making any costly mistakes. Our competitive rates, efficient services, and talented team can help ease the process of the home loan.
We help our customers every step of the way. We prioritize informing and educating our clients about the home buying process. Our client’s happiness and confidence upon closing a deal reflect our excellent quality services. 3CALoan local mortgage broker provides no tax return home loan which is also called no tax return, without tax return, without tax return, private hard money home loan, private hard money loan, bank statement home loan, bank statement loan, equity loan and many more. If you still have any doubt, you can contact us at (818) 322-5626 or (818) 3CA-Loan today and our specialists will be in touch promptly to answer your questions. We will run you through the details of home loans and hold your hand throughout the process. We only have one aim of helping people first.