How Does Your Credit Score Affect Your Ability to Buy?
When you start looking at buying a home at the Lake of the Ozarks, there are several things to consider. First and foremost, how much can you afford and how will you pay for it? Chances are you'll require a mortgage to cover the cost of buying that dream home. Your credit score, as well as the information on your credit report, are key ingredients in determining whether you’ll be able to get a mortgage, and the rate you’ll pay. A higher credit score reflects a better credit history and can make you eligible for lower interest rates. With that said, we're sharing with you why your credit score affects your ability to buy a home and what you can do to improve yours.
Understanding Your Credit Score
A credit score is a statistical number that evaluates a consumer's creditworthiness and is based on credit history. Lenders use credit scores to evaluate the probability that an individual will repay his or her debts. A person's credit score ranges from 300 to 850, and the higher the score, the more financially trustworthy a person is considered to be. But keep in mind that your credit score is only one component of your mortgage lender’s decision, but it’s an important one. Other factors include:
Fixing Your Credit
Bad credit or no credit doesn't necessarily disqualify you altogether from purchasing a home, but you may have to go through some pretty extensive work to get an approval, and may not get the best interest rates. Errors on your credit report can reduce your score artificially, which could mean a higher interest rate and less money in your pocket. So it is important to check your credit report and correct any errors well before you apply for a loan. Since credit scores are often the result of having a high debt-to-credit utilization ratio, one of the best ways to improve your score is to get rid of existing debt, such as high credit card balances. Another way to boost your score is to simply make your payments on time each month.
Now that you know what a credit score is and how it affects your ability to buy a home at the Lake of the Ozarks, you can begin getting yourself financially set to purchase your dream home! Once you're financially ready to buy your dream home, contact Team Andy Gibson, the best real estate team at the Lake of the Ozarks, to start your search!
Understanding Your Credit Score
A credit score is a statistical number that evaluates a consumer's creditworthiness and is based on credit history. Lenders use credit scores to evaluate the probability that an individual will repay his or her debts. A person's credit score ranges from 300 to 850, and the higher the score, the more financially trustworthy a person is considered to be. But keep in mind that your credit score is only one component of your mortgage lender’s decision, but it’s an important one. Other factors include:
- Credit history with that lender
- The amount of debt you already have
- How much you have in savings
- Your total assets
- Current income
Fixing Your Credit
Bad credit or no credit doesn't necessarily disqualify you altogether from purchasing a home, but you may have to go through some pretty extensive work to get an approval, and may not get the best interest rates. Errors on your credit report can reduce your score artificially, which could mean a higher interest rate and less money in your pocket. So it is important to check your credit report and correct any errors well before you apply for a loan. Since credit scores are often the result of having a high debt-to-credit utilization ratio, one of the best ways to improve your score is to get rid of existing debt, such as high credit card balances. Another way to boost your score is to simply make your payments on time each month.
Now that you know what a credit score is and how it affects your ability to buy a home at the Lake of the Ozarks, you can begin getting yourself financially set to purchase your dream home! Once you're financially ready to buy your dream home, contact Team Andy Gibson, the best real estate team at the Lake of the Ozarks, to start your search!
Keller Williams Lake of the Ozarks Realty
858 Hwy 42
Osage Beach, MO 65065
573-286-5907 Cell
573-348-9898 Office
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