Your credit score is more important than ever if you’re trying to get a mortgage. Rather than having a standard percentage charged on all home loans, today’s loans are dependent on a number of things but the primary concern is your credit score.
Your credit score is based upon your credit history as reported on your credit report. A complex mathematical equation is used to determine your score but that number is key for getting a home loan. Credit scores are figured by a method created by Fair Isaac Corporation and are often referred to as FICO scores. Scores range from 300 to 900 and the typical home buyer falls somewhere in the 600 to 700 range. The higher your credit card, the better.
If you’re concerned about your credit score and getting a home loan your first step is to determine what your credit score is by ordering a free credit report. Each of the three big credit reporting agencies may have a different score for you but they’ll all be fairly similar.
Once you determine your score you can see how likely you are to get a loan and if you qualify for the better interest rates. Any rating below 650 should be boosted if you can to push the envelope and get you a better interest rate.