So you went ahead and applied for a mortgage loan and you’re all geared up to refinance refinance at today’s fantastic interest rates and your lined up to be preapproved to purchase a house.
Your income is good, your assets is good, you got two years on the job, and even don’t have much debt. Sounds like the perfect borrower for a home mortgage loan.
So you go have a conversation with a mortgage professional and they pull a copy of your credit report………….. and surprise your credit score is now is a 600 or lower!
Does this sound crazy? Yes it does, but unfortunately, this trend is occurring more frequently than ever before! Remember the old medical collections or car loan or worse the student loan that you thought you were paying on time each month and your electronic bill pay system skipped a couple months of payments? It happens.
So what do we do about it?
Here is a mortgage tip: how to increase your credit score to get a mortgage loan.
Well chances are there is good reason that your credit score dropped so many points. Maybe you inadvertently skipped a few payments on a credit obligation and didn’t realize it? Maybe those old collections still have not been charged off. Or maybe you were a cosigner with a friend on a credit obligation and they failed make the payment on time and now your credit score is being adversely affected.
More often than not these scenarios do happen, but there is a solution…. its FREE TIP.
Follow these steps in the exact order and you will be on your way to increasing your credit score to to get that home loan.
Step 1- Open up new credit. Depending on the severity of your credit score a good place to start would be to obtain a cash secured credit card. The cash secured credit card is just that. It is secured by cash, not credit. This means that it’s very hard to get denied for a cash secured credit card. This cash secured credit card can be used for small things such as gasoline for your car. Pay it off in full each month and after 30 days your credit score will likely improve.
Step 2-Open up actual credit cards. After you have the cash secured card in place and as your credit score slowly starts to improve, you will want to keep this momentum in credit improvement process, by opening up both a store credit card and a regular credit card such as Discover etc. The idea here is to slowly over time get new credit and be current with it.
Step 3- Check in with your mortgage lender. It’s your responsibility to be proactive and increasing your credit score doesn’t have to be difficult, so long as you have the right advice. Check in with your mortgage lender after four months of successfully completing steps one and two and give them the authority to re-pull your credit report.
After approximately 4 to 6 months your credit score will be higher, in some cases dramatically higher. A new credit score upwards of 50 points higher is not uncommon.
So there you have it the best mortgage tip on how to increase your credit score.
Be smart, get the right mortgage loan officer and you will easily be on your way to improving your credit score for your next refinance or purchase loan. If you need to get preapproved right away we can look at your credit report and do an in-depth what if analysis with our special software that allows us to run scenarios. Get the best information on how to increase your credit score at Sonoma County Mortgages!