Boost Your Credit Score To Land the Home of Your Dreams
Large purchases such as acquiring a luxury home at Botaniko Weston are rarely done in a single one-time cash payment to the developer by the prospective house owner. The more common path taken is that the prospective house owner will search for a home and approach a mortgage lender of their choice who will then have the home appraised for its real value that they are willing to avail to the borrower on condition that they make a certain amount of agreed monthly payments.
In this type of transaction, the borrower is required to put down a certain amount of down payment and then the lender will pay the developer on behalf of the borrower. Clearly, the mortgage lender faces some risk if the borrower cannot meet their payment.
As part of their due diligence, mortgage lenders have certain parameters to measure the ability of a borrower to meet their payments. One of the most common ratings is the credit score. A credit score is a number representing your ability to pay back money borrowed. The higher your credit score the better your chances of accessing credit.
Having a high credit score means a lender faces a lower risk lending you money to pay for a luxury home at Botaniko Weston. Your credit score is calculated by three credit bureaus: Experian, Equifax, and TransUnion. Without going into the details of the calculation methods, the credit scores from the three bureaus are usually roughly the same.
The main variables that go into your credit report are the following:
Credit payment history: which means whether you meet your credit card payments on time.
Debit to credit utilization: which measures how much Debt you’ve accumulated on your available credit limit. There higher the debt accumulation, the lower your score.
Length of credit history: the longer your credit history the better.
Credit mix: this is the portfolio of your credit sources so the more the credit sources the better.
New credit accounts: increases your risk of defaulting and therefore works against you.
Your credit score and your lender
Most lenders will provide you a mortgage if you have a credit score of 660 or higher.
How to improve your credit score
Check your credit report for errors
Variables in a credit report such as the credit payment history could be wrong because maybe a creditor failed to report a credit payment that you ready-made. Reporting this to the credit bureau with proof will lead to an amendment and a positive reflection on a credit score.
Pay your credit card debt
Making payments on your credit card debt will have a positive effect on your debt to credit utilization another key variable in your credit report. A good way of optimizing your credit utilization is using a different credit card to pay your credit balance down to 1% of your credit limit before it is reported to the Credit Bureaus by your lender.
Be current with your credit bills
If you’re not current with your credit bills then make a good on that late bill and it’ll give you a good credit boost putting you in a better position to access mortgage to buy your Botaniko Weston home.
Open a new credit account
Opening a new credit account increases your ranking on the other variable of your credit report which is your credit mix. It will also improve your credit utilization which means that in the eyes of the credit bureaus you can handle different kinds of credit accounts making you a more trusted borrower. And placing you in a better position to access a mortgage to purchase your dream home at Botaniko Weston.
Be an authorized credit card user
If you’re an authorized credit card user of a responsible partner or family member who always pays their credit card bills on time you can piggyback on their good credit card history. And assuming that they’ve had the credit card for long you can again piggyback on their good Credit Management. The opposite also applies in that if they have a bad history he will be back on that too limiting your chances of acquiring a mortgage to purchase a Botaniko Weston home.
So we hope this explanation of the relationship between your credit score and your ability to get financing has been useful. Improving your credit score basically means making positive changes to the variables that are used in your credit report.