Mortgage Loan Advice: 5 Steps to a Higher Credit Score

The purpose of this tip guide: to explain the importance of good credit and show you how to get it. When you apply for a home mortgage, your credit will be placed under the microscope. Mortgage lenders will study the credit for discovering what type of category of risk is falling. When your credit score is low, the risk factor is high. In this scenario, is likely to have difficulty getting a loan. But when the opposite is true (the credit score high and low risk), you'll have a good chance of qualifying for a mortgage loan. Keeping a Good Credit Score You've probably heard the expression "An ounce of prevention is worth a pound of cure." These are words of wisdom when it comes to your credit. It is much easier to maintain good credit than it is to recover the bad credit. So try to stay out of that neighborhood "to begin. Five steps to a better credit score 1. Maintain the debt / income ratio at or below 20%. Mortgage lenders prefer the total debt to be not more than 20 % of net monthly income. If your debt is equal to over 20% of your income, try to pay it down as soon as possible. 2. Be sure to pay all your bills on time. You pay your bills on time will increase your credit score. In contrast, a history of late payments will lower your score. 3. Do not let your credit card balance get away from you. This increases the total debt, which leads to an unfavorable debt-to-income ratio. Remember the rule of 20% from Step # 1? 4. When you receive a bill by credit card, always pay at least the minimum amount that is owed. If you can afford to pay more than the minimum, by all means to do so. This will reduce your balance faster and give you a more favorable debt-to-income ratio. 5. Do not apply for student loans too. Request a credit too often, and sends a signal that can not be manage their finances properly. Use of credit and loans sparingly, only when you need it. Remember, the better your credit score, the better the chance of qualifying for a mortgage at a good interest rate. So take an active role in maintaining good credit. Start early and focus on the long term. * Copyright 2006, Brandon Cornett. You can republish this article if you keep the subtitle and author's note, and also leave the hyperlinks active.