A Summary Of Your Worthiness

One of the first things many lenders will look at before considering whether you are a worthy candidate to receive a loan is your credit score.  Even if you can afford to pay back a loan but have a poor credit, your loan can and probably will be turned down.  If you think about it, what good is it to the lender if you make a $1,000,000 but don’t pay your bills?  A good credit score shows that you can be trusted to pay back your debt.  Of course, if you can afford to buy a home without a mortgage then you don’t have to worry about this at all.

Okay, so realistically not everyone has perfect credit, but it’s not too late to start fixing it.  The obvious one is to start paying down your debt and making your payments on time.  Lenders like to see a gap between the amount of credit you're using and your available credit limits. Getting your balances below 30% of the credit limit on each card can really help; getting balances below 10% is even better.

If you are a renter and want to buy in the future you would want to make a good habit of paying your rent on time every month.  Every little thing that has to do with making a payment affects your credit.  Take a look at the article below.




Rental History: More Important in Getting a Mortgage?
DAILY REAL ESTATE NEWS | TUESDAY, JANUARY 10, 2012

Borrowers who have a history of paying rent on time may see a boost to their credit score.
Experian, a leading credit report company, added a section to its credit reports last year that reflected on-time rent payments, which helped give a boost in the credit scores to some on-time rent payers. Now the two other major credit reporting companies are following suit.

CoreLogic and FICO recently announced they are also adding a score that reflects payment histories from landlords, The New York Times reports.

“Evidence of positive rental payments could be a plus for consumers,”  Joanne Gaskin, FICO’s director of product management global scoring, told The New York Times.

Nearly half of high-risk consumers saw an increase of 100 points or more after their rental history was added to their credit report, says Brannan Johnston, the managing director of Experian’s rent bureau. Consumers with average or higher credit scores, on the other hand, did not see any major difference to their scores.

For former home owners who lost their homes to foreclosure, they may be able to rebuild their credit histories more quickly now by showing they are “very responsible renters,” Tim Grace, senior vice president of CoreLogic, told The New York Times.