young prospective homebuyers look at a laptop to research credit score factors which will impact their ability to qualify for a home loan In today’s economy, many people are uncertain about the process of securing a home mortgage loan. Questions can vary from credit score concerns, to down payment amounts to picking the right type of loan. When starting this process, being prepared can be your best asset, and JVM’s Client Advisors can help ensure your preparedness. While applying for a mortgage loan, a borrower’s credit is a significant factor, and we are often asked how one can improve it. 

    Establishing Good Credit

    The credit requirements for mortgage approval are not always widely known. Since the sub-prime lending meltdown in 2008, fluctuating industry standards have made it unclear to the majority of borrowers whether their credit score is good, bad, or somewhere in between. The reality is that there is not always an exact credit score required to have your loan approved.

    If you’re unsure how to repair your credit score, these tips are a practical guide for establishing, maintaining, and improving your credit score for mortgage approval.

    1. Prove you are responsible for both types of large-scale credit. The most effective credits for your credit score are installment loans (auto loans, student loans) and revolving credit (credit cards).
    2. Pay down your credit card expenses. The gap between your card’s limits and the amount of credit you’re using is something lenders may take into consideration. A good level would be a usage of 30% or less. An even better level would be a utilization below 10%.
    3. Make sure your payments are on time. One of the most crucial things you can do to help your credit score is to pay your bills on time. Oftentimes auto-pay features can help ensure that you never miss a payment.
    4. Use your credit in moderation. You don’t want to deepen the debt you’ve already accrued.
    5. Understand your rights as a consumer. A helpful resource for consumers is the Federal Trade Commission Consumer Information. As a borrower, you can dispute inaccuracies from your credit reports. Credit companies are then required to investigate relevant information. By doing so, inaccurate or derogatory marks on your credit report can often be removed, resulting in your credit score improving. Improving your score can help qualify you for various loan products or lower interest rates.
    6. Avoid possible scams. Advertised services that prey on people with low credit may damage your score instead of relieving your debt. The steps above are a much more effective method of improving your credit.

    Next Steps For Your Credit Health And The Mortgage Process

    When beginning to work on your credit score, you want to have the right perspective. It’s important to understand that there are no quick fixes for your credit. An individual can only expect to see the long-term advantages that come after consistently following the above steps.

    If you have any questions about your credit health, qualification for a home loan, or any other mortgage-related questions, we are available seven days a week to help. Our Client Advisors can be reached here, by phone at (855) 855-4491, or by email at [email protected].

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