What Factors Determine A Credit Score
If you're looking to get a mortgage, there are a number of factors that can influence financing.
Once you've submitted a home loan application, your mortgage specialist will review your assets, liabilities and other relevant parts of your financial profile. One of the most important criteria used to determine loan approval is your credit history as well as your credit score. By reviewing your credit report, we can determine how dependable you've proven yourself to be by making timely payments on utilities, medical bills and other financed assets.
The spectrum of credit scoring
If you're not familiar with how a credit score is created, be sure to read our overview. As you'll see, your credit score is determined based on payment history, amounts owed, length of credit history and new credit you've been granted. If you've been financially active for a number of years, make all payments on time, owe little or nothing to creditors and continue to add new credit, you may have what's considered "excellent" credit, the highest being 850. If your money management history is checkered with late payments, outstanding debt and other red flags, you may have a score at the lower end, which starts at 300.
Most Americans fall somewhere in the middle.
So how does this relate to getting a mortgage?
At Bethpage, it’s important to remember that there's no magic number for securing a mortgage loan, and that your credit score is one part of an application with many features to consider. However, your credit score can influence whether a loan is granted and the interest rate you'll pay.
Does that mean my low credit score prohibits me from getting a mortgage?
Not necessarily! The good news about credit scores is that they're living figures that change over time. As your financial standing improves, so does your credit score! Adopting better bill-paying habits and eliminating debts you currently owe can help raise your credit score. We've written a guide for improving your credit score with handy tips for better money management.
Your credit score, assets, liabilities and financial history are unique to you and therefore, your mortgage application will be evaluated in respect to the whole picture. However, demonstrated credit responsibility is a major piece of approving a loan of any kind. If you have questions related to your specific mortgage application, contact one of our financial advisors today for planning advice.
Get Started »