Mortgage Ready Credit – Understanding Your Rights

Getting your credit "mortgage ready" involves understanding how your credit works, and your rights involving credit information.

To be mortgage ready in regard to your credit report score, let's look at what each credit score component means:

Timely payments

Making timely payments has the most impact on your credit report (at over one-third of the total evaluation). It refers to prompt payoffs of debt vs. late payments, or any financial judgments or delinquencies accrued. Delinquencies of any kind in the past two years are the smartest risks to avoid.

Debt ratios

Outstanding balances on your credit lines determine how much available credit you have. Having a 30% or below (of credit you are using) is a good outstanding balance.

Credit history

The longer you have a good credit history, the better candidate you are for obtaining a mortgage. (But this is not, by any means, a requirement for a good credit rating.)

Credit types

Auto, credit card, and student loans make a good mix of credit types.

Past credit applications

When you apply for credit, each inquiry impacts your credit score. Be sure to hold off and apply for credit only when you are ready. This includes applying for credit cards, student loans, or buying a car.

Credit Ability

During the mortgage process, it's important to keep your credit rating as strong as possible.

Due to guidelines of some mortgage programs, your credit score is subject to a second review just before your mortgage closes. This means that if you used your credit for something after the initial mortgage application (and first credit score review), you will lower your credit score. This can complicate matters, possibly delaying your scheduled closing, decreasing your mortgage amount, increasing your interest rate, or risking denial of the mortgage altogether.

Don't max out credit cards, close paid off accounts, take a self-funded trip to the Bahamas, quit your job, make late payments, co-sign on a loan, or change your name or address.

Opt out on risky mortgage leads: Solicitations from unfamiliar finance companies (called "trigger leads") may promise "great deals" on mortgage loans. See the web site Opt out Prescreen.com, to avoid unwarranted businesses that buy your name and information without your specific instructions.

Be sure to ask your mortgage expert any questions you may have about your credit score. MidCountry Mortgage consultants know how credit works, and they are here to help in the pursuit of your dream of new homeownership!

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Minimum and Maximum loan amounts apply. Rates and programs subject to change at any time. Loans subject to borrower qualifications, property evaluation and credit approval. All rates and program guidelines subject to change without notice based on consumer eligibility and marketing conditions. All loans subject to credit approval and compliance with underwriting standards.

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