If you’re applying for a mortgage loan, it’s wise to review your credit report and evaluate your score first. Most lenders consider anything above 700 good, and anything 750 or higher excellent. Fortunately, even if your score falls below this threshold, you can take steps to improve it before applying. To devise a plan to increase the score, though, you have to know how it’s calculated. 

What Kinds of Factors Impact My Credit Score?

Factors that will have the greatest impact on your credit score include your payment history, borrowing history, ratio of total debt to total credit available (credit utilization), and types of loans you’ve taken out. Those with the highest credit scores have a variety of loans in their name, have more than a decade of credit history, have never missed a payment, and carry less than 10% utilization on their revolving accounts. 

Factors that will have a lesser impact on your score include the number of recent inquiries made by potential lenders and the average age across all accounts.

Why Should I Try to Increase My Score?

Having a high credit score will not only make it easier to obtain financing for major purchases, but will also allow you to secure the best interest rates available. At the end of the day, your score is a reflection of your creditworthiness, and lenders are more willing to take a chance on those who have a history of paying back their debts.

As such, it’s wise to improve your score as much as possible before applying for any kind of loan. You can do this by making on-time payments, limiting the number of hard inquiries, and reviewing your credit report for any inaccurate marks. If you notice any mistakes — such as an error with your address or your name — report it to one of the credit bureaus. 

If you’re happy with your credit score and are ready to apply for a loan, contact CMG Financial in Chattanooga, TN. Founded in 1993, this private mortgage lender is proud to help clients purchase their dream homes. Regardless of the type of loan you plan on applying for — VA, HUD, RHS, GNMA, FNMA, or FHLMC — they’ll offer the detailed, personalized expertise you need. Visit the website to learn more about their offerings or call (423) 991-0085 to speak to a member of the team today.