The Importance of Credit Scores if You Are to Buy a Home in Montrose, Colorado
Are you planning on buying a home in Montrose, Colorado? If so, you may be wondering how important your credit score actually is when it comes to moving forward with the transaction. To be blunt, if you are looking to get financed for a mortgage loan, lenders are going to be giving your credit score a great deal of consideration.
Therefore, before you head out to brose homes for sale, it is important that you understand just how crucial the right credit score is, and how you can go about ensuring that yours is where it should be.
We understand just how important credit scores are if you are going to purchase a home! That’s why, here at Glenn Steil Style Real Estate, as a Montrose real estate agent, I have comprised some insight to assist you with understanding. So, be sure to continue reading if you are all set to learn more:
· What is a Credit Score? You will first want to understand what a credit score is. A credit score is used to determine how likely you are to pay back a loan efficiently. Companies will use a mathematical formula, which is known as a scoring model, to create your credit score. The credit score is calculated by the information that is on your credit report, such as your bill-paying history, your unpaid debt, and your number of active loans.
· What is a Good Credit Score? Credit scores are determined in points. Ranging from 300-850, FICO is the most popular scoring model. The following shows the categories of range:
o Bad Credit: 300-600
o Poor Credit: 600-649
o Fair Credit: 650-699
o Good Credit: 700-749
o Excellent Credit: 750-850
· What Makes Up a Credit Score? Many factors make up a credit score. The most popular calculations are as follows:
o Payment History: 35%
o Outstanding Balances: 30%
o Length of Credit History: 15%
o Types of Accounts: 10%
o Credit Inquiries: 10%
· Why Are Credit Scores Important? When buying a home, lenders will first want to see what you credit score is, as they will not want to lend to someone with a bad score, as it could mean that they could potentially not get their money paid back to them. Therefore, a good credit score is highly anticipated! So, you will certainly want to be in the “Good” credit score range. With a better credit score, you will have better mortgage loan options and interest rates, which is obviously ideal!
A good credit score is certainly of importance if you are to buy a home! These are just some pointers to get yours headed in the right direction.
Are you ready to take part in a home buying or selling journey of your own with a real estate agent in Montrose, Colorado? If so, please contact me here at Glenn Steil Style Real Estate, as I am all set to be yours!