What is your credit score, and how does it influence your ability to get a loan?
Credit scores are a historical measurement of your relationship with debt. We have all come to rely on financial obligations, known as debts, to help us get established in our lives. More recently, we are introduced to borrowing funds because of student loans. But how you pay off these loans and pay this debt down says a lot to financial institutions. If you have a low credit score, you are deemed by financial institutions as high risk. This means that buying a home could become an extremely expensive endeavor for you if you have no choice but to get a loan. Terms will not be nearly as favorable if you have shown a historical behavior that says you are not reliable in paying back your debts.
When buying a home, your credit score is vital because financial institutions use it to determine your mortgage package. They use this to assess your interest or insurance needs, and again, the overall terms. A few tips to assist you with achieving a healthy credit score is below:
- Pay your bills on time. If you have bills you can cut back on, try doing this to put the funds toward existing debt.
- Pay the minimum payment on your debts at all times. Make sure that you are showing good habits when it comes to paying the amount you committed.
- Don’t take on new debt when trying to purchase a home. Please don’t add a car loan to your portfolio or any other student loans because it impacts your overall debt to income ratio and your credit score when seeking financial support for a home.
If you need further assistance when trying to understand the influence your credit score has over your home purchasing abilities, give us a call (307) 635-0303. We would be happy to assist you and answer any of your questions. Remember, we are real estate professionals and experts who are ready to serve you!