Your credit score is a representation of your borrowing history to date. If you’ve paid back every loan you’ve ever taken out in good time and never been late with a credit card payment, you should have a good credit score, and this question probably won’t apply to you.
However, for a significant percentage of Americans, this is unfortunately not the case. A few mishaps with debt early in life can leave you with a poor score, which can make securing loans very difficult.
Some mortgage providers won’t lend to you, while others will only offer loans with prohibitive terms.
However, that doesn’t mean that getting a mortgage will be impossible for you. There are several options to look into if your credit score is causing problems.
Firstly, consider going to a provider who specializes in lending to those with poor credit scores. These will typically be smaller, less established institutions, but they can still provide you with competitive rates and loan structures.
Failing that, you should try to improve your credit score before you apply for your mortgage. There are a couple of things to keep in mind if you’re pursuing this strategy.
Firstly, be vigilant about all your short-term credit repayments. Be sure to stay on top of your credit card bill each month, and try not to use it in the first place unless you have to.
If you have time to wait before you need to take out a mortgage, consider taking out a term loan. If you can pay back this loan within the required timeframe, it might give your credit rating the boost it needs to make your mortgage application successful.