How Mortgage Affects Credit Scores ( You Know Well . )

How  Mortgage  Affects  Credit  Scores ( You Know Well .  )

How  Mortgage  Affects  Credit  Scores ( You Know Well .  )
How  Mortgage  Affects  Credit  Scores ( You Know Well .  )

Financial gurus constantly warn consumers to keep their credit scores in tip-top sizes if they are planning to buy a home in the near future.

The higher your credit score, the more you will have to get the best mortgage rates.

Once you have a mortgage, how will this increase your credit score?

You will hit a credit

Immediately after your new mortgage, your credit will have to suffer.

Your credit score is a numerical representation of your ability to repay debt liability when you take the most credit, then most consumers, your score goes down until you prove that you have a loan back You have the ability to - and that you will actually pay the payments you pay.

Due to this temporarily low of your score, you may find it difficult to get other loans or get a loan with the loan terms.

Make sure your payments are on time

How can you get your score back to your pre-mortgage? Do not sign up for the services from time to time every time they say that they can increase your credit score faster - just pay off your mortgage payments - and all other payments, for that matter - on time. As you prove that you are a responsible borrower, your score will naturally increase.

According to the FICO, the company in charge of compiling your credit score has 35% payment history.

Pay your bills on time and completely if your busy lifestyle sometimes focuses on the low paying bill in your priority list, then set an automatic payment through your bank so that you can never forget . For better advice, see the best ways to improve your credit score.

You just take more credit

Know the basics Your credit report reflects your ability to repay the loan, you only earn so much money so that the amount of loan is necessary in the good proportion of your income. This is called your debt-to-income ratio.

It is considered optimal to not exceed 36%, and your mortgage is not going to exceed 28%. If you know that in the near future you will buy a house, do not take on other debt obligations to reduce your debt-to-income ratio.

However, continue to build your credit history. The more closely related to your credit score, the credit is not as cheap as the credit is low. And of course, paying your mortgage on time is good for your credit history.

It can improve your credit mix

The calculation of your credit score is a bit of a secret. FICO publishes general guidelines to help consumers understand their scores, but no one knows the specifics of the calculation. However, you play a role in your score.

Think of a mortgage as the peak of consumer debt. If you can qualify for a mortgage then you are considered to be a trustworthy borrower.

If your credit report does not have any part of the credit card loan, then your score will not be high, revolving credit for the loan (your mortgage) This mixture of about 10% of your score.

But, as Spider-Man's uncle once said, "Great responsibility comes with great power." If you pay a credit card for a while, the effect on your score will not be large enough.

 If you do not pay your mortgage on time, expect to reflect on your credit score. If this happens, then pay as soon as possible. If it is a bit late, your mortgage company can not report it to the credit bureau.

Bottom line

This is good news: As long as you pay your mortgage all the time, the loan for a home is considered responsible loan.

And try to avoid making any other major purchases within six months of taking a mortgage, because your credit score will probably leave the loan seeking process.

The history of paying your mortgage and other bills responsibly will bring your score back soon.

thanks for the time .

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