Credit and Mortgages in St. Louis
The Do’s and Don’ts of Credit: By Senior Mortgage Banker, David True
So, you have made the decision to either purchase the home of your dreams or refinance your current mortgage. It is important for your credit reports and scores to be as pristine as possible because interest rates and the ability to receive an approval rest on your credit today.
When mortgage lenders are quoting rates today, they need to know your middle credit score. They request all three bureaus (TransUnion, Equifax and Experian) and utilize the middle score of the three. The higher the score the more favorable the interest rate becomes for you. We encourage clients to review their credit. There are many different services available today. However, the website that offers one free credit report per year from each credit reporting agency noted above is www.annualcreditreport.com. This gives you the ability to review what is currently on your credit report and you can also pay to obtain all three credit scores.
It is important that you review all three bureaus. There are creditors that do not always report a debt to all three bureaus. They may only report to one or two of them.
Here are some important tips for how to ensure your credit is in the best shape when you begin the mortgage process:
-Do pay your bills and pay them on time. Any late payments can negatively affect your credit.
-Do pay off judgments. When you do this, you MUST get a “Satisfaction of Judgment” from the courts. If you don’t get this, it will likely remain on your credit.
-Do try to keep your credit card balances at least under 30% of the credit limit.
-Do review your credit report for accuracy. If you notice something on your credit report that is inaccurate or does not appear to be yours, you have the ability to dispute it with the credit bureaus, and they will investigate it for you.
Once you have begun the mortgage process, ALWAYS contact your loan officer before you make any credit decisions. Even if you think it’s the right decision, it could negatively impact your credit.
Now, let’s discuss some of the actions you should not take during the mortgage process:
-Don’t apply for new credit. When you do this, it will generate a “credit inquiry”. Credit inquiries lower your total credit score.
-Don’t consolidate or close your credit cards during the mortgage process.
If you or someone you know is thinking about homeownership or refinancing at this time, have them reach out to First Integrity Mortgage Services in St. Louis, MO today.
For more information about the process or if you have any questions or comments regarding this article, please contact David True, NMLS# 604989, at (314)566-6200 or dtrue@firstintegrity.com.