Typically, with most mortgage companies you will need it least it 620 minimum credit score to get a mortgage. Let’s be clear about something else, this is also a middle credit score. What a mortgage lender pulls your credit report they obtain three credit scores a high credit score, middle credit score and a low credit score and they take the middle credit score as the best barometer of credit worthiness for the home loan.

So your credit score is not high enough, what to do:

Paying Off Old Debts: This is a double edged sword because if there’s old collection accounts for example with derogatory is and outstanding balances, paying off such an account will make your credit score typically drop immediately and then after approximately 60 days, the credit score should shoot up dramatically.

Applying for other/new credit: perhaps you don’t have enough credit history were enough active credit supporting healthy credit score? One method is to literally go out and apply for credit such as a store credit card, traditional credit card like a standard Discover card or MasterCard for example. Looking for a car? Having an auto loan on your credit report that reports current, will significantly improve your credit rating, but at the same token it’s a liability which reduces borrowing power. As such, you will need, higher income to offset the liability payment. In fact, you would typically need, double the liability car payment in income in order for the auto loan payment and not negatively affect your borrowing power. For example car loan payment is $300 per month, $600 per month in income would offset the car payment.

High credit card balances: you’ll want to make sure your credit card balances in any given month are never more than 30% of the total allowable credit line. If you have a credit card with $1000 borrowing limit, you don’t want your balance to ever exceed $300 in any given month.

Student loans: if any of these are reporting derogatory as in the previous delinquency of some sort, understand this is hugely detrimental to your credit score. Student loans are just as important as car loans and a mortgage when it comes to having a heavy weight on your credit score. Call your student loan servicier and beg and plead with them to remove the derogatory. If you get the right person, you just might get a higher credit score. *Note when doing this or getting rid of any derogatory item on a credit report, you want the item completely removed from the credit report as though the derogatory was never there from the start.

*Note, we are not a licensed credit repair agency, these tips for improving your credit score are not guaranteed but in our experience has shown improvement in credit scores many times necessary resulting in the approval of a new mortgage. Individual results will vary as each credit report and financial picture is different.