Lenders Say Credit Scores are Everything

Many first-time and move-up buyers of Sylmar homes are asking some very good questions these days about their credit scores. I always tell them to check with their mortgage lender. The lender will have all the details about credit scores and how low or even high credit scores can make a difference in what kind of loan terms the Sylmar home buyer can obtain.

The mortgage lenders I work with tell me that when they run a credit report (for the purpose of qualifying a person for a loan), the data is gathered from the three main credit reporting agencies. They are TransUnion, Experian and Equifax. Each of these credit information companies has a proprietary formula for issuing a credit score, so the score issued by each company may be different. In most cases, the middle score is what a lender will use to determine a buyer’s creditworthiness. Therefore, what kind of loan you get from a lender to buy your Sylmar home is directly related to your credit score.

A mortgage lender I work with in my Century 21 All Moves office recently told me that a credit score of 740 or higher is likely to qualify a buyer for some of the best rates and terms available for conventional 30-year-fixed loans. He said not long ago a credit score of 700 to 720 was very good for the same loan, but not anymore. Those with credit scores in the 640 to 660 range will likely pay extra now to get a good interest rate and terms, whereas before the cutoff score was 620, he added. Such are the times we live in, and they are changing rapidly.

While these numbers are general in nature, some basic money management facts are fairly standard if one wants to improve a credit score. Basically, you have to do what the folks in the highest credit score range do: pay every bill on time, keep credit cards active but with low balances, keep the number of active accounts steady, and have a long history of repayment.

The above is just some general information about credit scores. Be sure to speak with your lender, the credit reporting agencies, or your financial advisor for more details about how your credit score affects your life, including buying a Sylmar home.

However, if you are ready to buy or sell a Sylmar home, call me at 818-970-1286.

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Filed under First time buyer, Lending information, Sylmar, Sylmar real estate

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