Good Credit

How does credit score affect your mortgage rate?

Businessman's hands with calculator and cost at the office and F

Businessman's hands with calculator and cost at the office and FAs we grow older, we become more focused on our finances. It is inevitable that this is going to happen since we are thinking not just for our futures but also, for the future of our loved ones. Millennials are growing families and settling down, while the baby boomers are setting themselves up for a comfortable retirement. Mortgage rate can affect both generations and unless you know the basic facts about credit scores, chances are you’ll be paying more than necessary.

What affects credit and what are the negative impacts?

If your credit rating is in the green, you have done pretty well. You have to be a pretty organized individual (unless you have had help from an accountant) to stay in control of what is going in and what is coming out of your bank every month. The darker the shade of your credit rating, such as red, the worse it is.

Let’s take a look at the things that can have an effect on your credit score:

– Making late payments

– Failure to make payments

– Taking out multiple loans/credit cards and failing to make payments.

When a lender looks at your credit score, they may dismiss your request to finance with a mortgage immediately. The reason for this is because you will look unreliable and will be untrustworthy for repaying in a timely manner. This is not to say that you will be turned down completely, but you will have to prove your borrowing capability to be reconsidered.

Advantages of Financing with a Mortgage

If you have discovered that your credit score is not so great, you can consider an alternative financing option. Whichever route you go down, you would be wise to absorb the pros before looking at the cons.

Here are the upsides associated with this mortgage financing option:

– Home ownership is made affordable.

– It is a cost-effective form of borrowing for mortgage financing.

– Take advantage of lower interest rates.

– Convert a variable loan rate to a fixed one.

Disadvantages of Financing with a Mortgage

Although there are advantages associated with financing a mortgage that you ought to be aware of, it is equally as important that you familiarize yourself with the disadvantages.

Here are the downsides associated with this mortgage financing option:

– The fees you pay for mortgage refinancing can cause your savings to reduce quite rapidly, depending on the lender and the circumstances.

– There is a chance that you will not be accepted if you do not meet the standard lender criteria.

No matter how bad your lending and credit history is, remember that there is always a solution. You can accomplish a number of new lifestyle-changing tasks that will contribute to your lending ability, such as paying back debts to overdue lenders, calculating your monthly mortgage payment, spend less, save more, and don’t bury your head in the sand.

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7 Simple Ways to Strengthen Your Credit Score

Whether you’re looking into buying a home soon or will be considering it in the future, it’s smart to stay on top of your credit score. Not only is your credit report important for obtaining a low interest rate, but a good one is essential if you want to qualify for financing. The goods news is that, even if you’ve had some problems in the past, there are ways to strengthen your credit score in advance of making a large purchase. Here are a few simple tips on how to do it.

Keep a close eye on credit card balances. One primary number that factors into your credit score is how much you have compared to how much you use. Try to maintain a 30 or lower utilization ratio, i.e., use about 30% of your available credit to avoid a negative impact on your score.  (more…)

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How Important is a Good Credit Score

How Important is a Good Credit Score

How Important is a Good Credit ScoreIf you’ve ever been turned down for a credit card, car loan, home mortgage or other loan, you probably realized too late that it’s important to have a good credit rating. Your financial history follows you everywhere you go for years, impacting aspects of your life you never considered when you skipped a utility payment or allowed a loan to go into default. Here are just a few reasons to maintain a good credit score – or make repairs to a poor one.

You’ll need a high credit score for most mortgages. Most homebuyers will need to obtain financing to purchase a home, which means approaching a lender for a mortgage. Lenders need to consider risk factors when issuing loans, as foreclosures and short sales cost them money. Banks seek to reduce their risk, so they’ll usually only work with borrowers that have good credit.  (more…)

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7 Building blocks of good credit

7 Building blocks of good credit -Paramount Equity®

Building your credit - Paramount EQuityThe building blocks of good credit are simple and attainable. Follow a few basic rules, and you can establish and maintain a great credit score. Setting yourself to the task today of building good credit will enable you to enjoy the most desirable long term credit scenarios. Here are 5 time-tested techniques you can implement at any time.

  1. Access Small Amounts Only. This is one of the most basic building blocks of good credit, but also the hardest. In our gotta-have-everything-now culture, the temptation to splurge on materials, goods, and services at the expense of your personal credit is overwhelming. Resisting this urge will provide you with years worth of excellent credit, more credit choices at lower rates and higher amounts. Aim to consistently use no more than 30-50% of your credit limit.
  2. Baby Steps. Remember all the times mom scolded you for eating too fast at the table? One slow step at a time is a responsible pace for building good credit. Don’t accept every card you’re offered. Envelopes arriving in the mail with pre-approved cards should be treated like the plague. (more…)
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What’s a Good Credit Score? And Why?

Paramount Equity® - Good Credit

credit score - Paramount Equity®Savvy consumers are aware of the importance of their credit score. Some learn how important their credit score is through their own trials in life. If you are like some, you may have applied for a loan in the past and learned that your credit scores are too low to qualify. Others have been fortunate enough to read about the importance of credit scores on their own, or they have learned this lesson from family or friends. While many people are aware that it is important to have a good credit score, few understand what a good credit score actually is.

What the Numbers Mean

If you pull your own credit report or a lender gives you a peak at a credit report they have pulled, you may see that you have a score that ranges from 300 to 850. (more…)

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