This is the number one issue on any creditor's list. A pattern of slow, late, or missed payments will knock down an applicant's credit score faster than bowling pins on Ladies League Night. Your ability to pay is huge, determined in large part by your income and other competing debts. But there is also willingness to pay. And against all odds, even with crushing debt-to-income ratios, there are some people who always manage to make the Mastercard payment. An unblemished payment record can partially offset negatives elsewhere. Your payment history is perhaps 35 percent of your total creditworthiness.
Percentage of available credit you're using
In the underwriter's eyes, pushing your credit limits is a cardinal sin. It's better to have two accounts at half-limit levels than one maxed out. Some say 30 percent is the ideal debt-to-limit ratio on a revolving account, so consider juggling three cards if that's what it takes.
Length of credit history
You can't change your age. But you can get started on the path to creditworthiness at a young age by opening a Visa account and faithfully paying off the balance each month. Never borrow money needlessly, but if it makes all-around sense, consider a car loan. A two-year track record of on-time payments will greatly raise your standing among potential mortgage lenders.
"Mix" of credit types
It's also preferable to have a variety of credit types such as mortgages, credit cards, car loans, and personal lines of credit. A diversified mix is characteristic of someone with a long credit history.
Proof of income
Note the two key wordsâ€”"proof" and "income." Your hard work as a landscaper may buy you a nice living, but unless you file a 1040 at tax time, you'll be having a lot of short conversations with loan officers. Even in an age when contracting and freelancing is widely accepted, conventional employees with "W-2" pay stubs have a leg up over the self-employed.
Assets go a long way to offset lenders' fear of risk. A property leveraged at 80 percent is less worrisome than one at 95 percent. And a six-figure 401(k) balance is a comfort too, even if they can't come after the money. It gives you options other than defaulting on a loan.
Recent efforts to get more credit
A red flag goes up if your loan request is preceded by a flurry of credit applications elsewhere, especially if they were successful. Can you pay the mortgage if you're also financing a new boat? Rapid expansion of credit can signal desperation and the start of a downward debt spiral if someone's income isn't sufficient to pay the bills.
Randy Roberts claims the following in his Trulia profile: http://www.trulia.com/profile/thelendersnetworkllc/
"Started my career in the world of finances and banking, after I got married I opened my own Real Estate company with my partner, Randall. We have been focusing on helping average americans live the American dream even with credit issues. Our main focus is originating loans nationwide, and Realtor referrals nationwide. Randall and I owned a credit repair company and know the in's and out's of credit, no offense but 99.9% of Lenders we talk to know nothing about credit. It is a science and I know everything there is to know about it. We have established contacts in the mortgage industry and have closed on loans as low as 500! We also do a little real estate investing so if you have any ideas or possible business deals I am all ears!"
So it appears that Randy is a lender, a real estate agent and credit expert yet I can't find any ties to him and the license # he lists on his profile,1741885. I searched the National Mortgage Licensing System and found nothing there which is strange because every lender has to be in that system. I checked the California Bureau of Real Estate but that license # belongs to someone else. See the search results here: http://www2.dre.ca.gov/PublicASP/pplinfo.asp?start=1.
So this guy isn't a licensed lender or real estate agent so what is he licensed to do?
Now let's look at the website these people are spamming Trulia with:
You have to scroll all the way to the bottom of the page to see the disclosure below:
The Lenders Network LLC is a Marketing Lead Generator with its main office located at 14241 Dallas Parkway Suite 650, Dallas Texas 75241, Telephone Number 855-841-4663. Â© 2013 The Lenders Network, LLC. All Rights Reserved. This site is directed at, and made available to, persons in the continental U.S., Alaska and Hawaii only.
So it turns out this is just a Marketing Lead Generator or something like Lending Tree or Lower My Bills where they capture your information and sell it as a lead to lenders and or real estate agents.
This is a far cry from the representation they've presented here on Trulia.
At least now you know what's really going on.
It depends on the loan program and the lender.
Most lenders require at least a 640 middle score for FHA, VA & USDA mortgages but there are still a few of us that can still go down to 620 on these programs. There are also some options for as low as 560 on FHA but the rate & costs make it pretty unattractive and it would require 10% down.
There is also an option for Fannie Mae down to a 620 score but the rate is going to be substantially higher compared to FHA.
One last thing: The interest rate is pretty much the same for someone with a 620 as someone with a 720 score on the government backed mortgages(FHA,VA,USDA)
Lenders look at all 3 of your credit scores. Based on your score is the different type of loan products they can offer. Christina has a ton! I highly recommend you give her a call or email her. She'd be happy to answer any and all your questions!
Give me a shout and I'd be happy to talk furthur! (423) 902-9445
(423) 902-9445 | firstname.lastname@example.org
Erica Anderson, RealtorÂ®
Deans group Realty, LLC
102-C Commonwealth Court
Cary, NC 27511
(919) 610-5126 (Direct/Text)
Typically, the higher the credit score, the lower your interest rate, and consequently, the lower your credit score, the higher your interest rate. Mortgage lenders do take other factors into consideration, such as work history, amount of down payment, current debts, and current income. Based on personal experience, I suggest that you run a credit report on yourself before applying for a mortgage to ensure that no errors exists on your report.
If you are a member of a bank or credit union, they should have mortgage officers available to assist you with questions and the loan process. They are your best reference. I hope this advice helps you.
Cody Swartz, REALTORÂ®
1715 W. Northern Ln #100
Phoenix, AZ 85021
Direct Cell: 602-919-9322
Equal Housing Opportunity