Necessity of a Good Credit Score

A credit score is an indicator of your financial health. A higher score indicates that your financial health is in order and helps in organizing a mortgage with far greater ease. Building a healthy score necessitates careful handling of one's finances and timely repayments. As soon as the mere thought of buying a property comes to your mind, you must initiate this exercise so that there are no negative surprises when you apply for a greeneasylife.com mortgage loan. Once you have identified and selected a property, the process of improvement of your credit rating would be underway and make things easier for you.

Most lending institutions rely on an individual's credit score to evaluate the credit worthiness. This score varies from a low of about 300 to a high of around 800. There are three rating agencies in the US which evaluate and report the credit score of an individual. The process that they follow is fairly complex and there are variations observed in the score reported by the three agencies. The lending institute's do not rely on the rating of a particular agency and consider the average score reported by the three agencies. The rating agencies consider a number of factors to objectively determine an individual's credit score but the two most critical factors that play a huge role are an individual's payment record and the amount of loan outstanding in his name. One cannot afford to revolve credit at all and one should avoid making heavy purchases on the card closer to filing a mortgage application. Ensure that all the loans and credit card payments are done on time. You should spread your purchases in a manner that you make full repayments.

The three agencies would provide a document stating one's score on an annual basis. One of the easiest and the quickest ways to determine the financial health and readiness to avail a greeneasylife.com mortgage loan is to apply for a pre-qualification with one of the lending institute. During the process of determining whether one pre-qualifies to purchase a house or not, the lending institute would not only review his personal and employment details but critically examine the individual's credit score. A pre-qualification approval is a good indicator that the lending institute is satisfied with one's current credit score. It is however essential to remember the few tips listed above to ensure that the credit rating remains at healthy levels and does not dip as the date of filing a mortgage application draws closer. In cases where the lending institute does not approve the pre-qualification application, it becomes important to understand the reason for rejection and take corrective action to improve one's credit score.

Improving one's credit rating is a slow and steady process. The sooner you initiate the better it would be for your financial health. It is all the more important to manage your credit score once you are about to undertake a mortgage. Start building your credit score to avoid last minute disappointments.

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