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If you are planning to buy a home in the near future, you should review your credit score as soon as possible. Why? Because your score is one of those all-important factors that can make or break your chances of getting a mortgage loan.
If you apply for a loan, and a lender reviews your credit (which I can guarantee they will), there will be one of two initial outcomes:
Your score will be high enough for their underwriting guidelines, which means you'll probably be able to get a loan through them. Or...
Your score will fall below a certain cutoff point, which means they cannot offer you any type of financing.
Obviously, the first scenario is what you want. And that's why you need to start researching the subject now, before you start applying for mortgages.
Check Your Score Early Enough To Improve It
All lenders have their own guidelines and standards when it comes to the mortgage-approval process. But there are certain general rules that apply across the board. So let's talk briefly about those.
In the current economy (after the 2008-2009 economic recession), you will probably need a credit score north of 650 just to qualify for a mortgage. This doesn't mean you will qualify for the best interest rates with a score like that, but it does mean you'll probably be able to get a loan.
Granted, the lending guidelines are a little more relaxed for FHA loans -- a popular option among first-time home buyers. But a higher score is always better when it comes to the home buying process. So it's worth pursuing, regardless of the time and effort you have to put into it.
There are plenty of things you can do to improve your credit score. These include paying all of your bills on time and using credit sparingly -- things you have probably heard before.
But it takes time to make these kinds of changes, so you need to start as soon as possible. That is the whole point of this article, as indicated by the title above. I recommend home buyers review their credit at least six months before they think they will apply for a home loan. Actually, the sooner the better. The more time you have to make changes and improve your score, the better off you'll be when it comes time to apply for financing.
Brandon Cornett has created one of the Internet's largest libraries of credit advice for consumers. If you enjoyed the straight-shooting advice in this article and would like to learn more, please visit http://www.homebuyinginstitute.com/credit.php to access the library.
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