Your credit score plays a big role when it comes to a mortgage. Whether you’re just starting to think about buying or getting ready to apply for a home loan, understanding your credit is one of the smartest first steps you can take.
At SWBC Mortgage, we believe that knowledge is empowering. When it comes to your credit, it’s the key to the happiest way home.
Why Credit Matters in Mortgage Qualification
When you apply for a home loan, lenders use your credit score to help determine your ability to manage debt responsibly. Simply put, your credit score helps your lender understand how likely you are to repay your mortgage on time.
A stronger credit score can help you:
- Qualify for more loan options
- Receive better interest rates
- Reduce your monthly mortgage payments
- Lower your upfront costs over time
It doesn’t mean homeownership is out of reach if your credit isn’t perfect. SWBC Mortgage offers programs designed to help a wide range of buyers, including those still building or rebuilding their credit. FHA home loans, VA home loans, and USDA home loans may be options to discuss with your loan officer.
How to Monitor and Improve Your Credit
The good news? You have the power to improve your credit health with a few consistent habits.
Here are a few easy ways to start:
1. Check your credit regularly.
You’re entitled to one free credit report each year from the three major credit bureaus (Equifax, Experian, and TransUnion ) through AnnualCreditReport.com. Keeping an eye on your report helps you catch errors and track your progress.
2. Pay your bills on time.
Payment history makes up a big portion of your credit score. Setting up reminders or automatic payments can help you stay consistent.
3. Keep balances low on credit cards.
Using too much of your available credit (known as your credit utilization rate) can lower your score. Try to keep your balances below 30% of your credit limit.
4. Avoid opening too many new accounts at once.
Each new credit inquiry can temporarily lower your score. Focus on managing your current accounts well before adding new ones.
5. Stay patient and persistent.
Improving credit takes time, but every good habit you build gets you closer to your homeownership goals.
Turn Credit Confidence into Homeownership
Understanding and improving your credit is just one part of the journey.
Download our eBook, From Dreams to Doorstep, to learn more about the mortgage process, from preparing your finances to getting your keys in hand.
And when you’re ready to take the next step, our loan officers are here to help you find the happiest way home. Reach out today to review your options and see how close you are to achieving your homeownership goals!