When it comes to real estate, many people take out mortgage loans to cover the costs. Whether you are approved or not depends on your credit score. This financial rating is based on a variety of factors, including your payment history, outstanding balances, credit history length, types of accounts, and the number of credit inquiries you have requested. Here is a little more information about credit scores and how to improve yours today. 

Does the Score Matter?  

If you were going to lend money to a friend, you might begin by thinking about previous times they borrowed from you to determine the likelihood that they will pay you back. A credit score works the same way for real estate lenders. By evaluating past instances when you have borrowed money, they can make a more educated decision regarding your ability to pay future balances. 

What Score Is Best? 

Credit scores range between 300 and 850, with 850 being a perfect score. People with excellent credit between 750 and 850 are eligible for the best loan rates, while people with good, fair, poor, or bad credit receive less desirable interest rates. A credit score also helps determine your private mortgage insurance (PMI) rate, which is essentially an insurance policy that helps protect the bank against failure to pay. 

How Can You Improve the Score? 

Fortunately, credit scores aren’t set in stone, and you can improve yours by making some positive financial decisions. Along with paying down debt and making payments on time, you can boost the score by contacting lenders, disputing mistakes on reports, and simply keeping accounts open for longer periods. 

When you are ready to start thinking about investing in a home in Denton, Lake Dallas, Frisco, Flower Mound, Argyle, McKinney, or Corinth, TX, turn to Lauri Bauman - Big Journey Homes. Since 2000, this dedicated Realtor® has been committed to helping potential homeowners to find the houses of their dreams, while also securing financing and managing every aspect of the real estate process. Browse available homes by visiting her website. For questions, call this real estate agent at (940) 321-5111 or text directly to (214) 566-1088.