Improve Your Credit; Improve your Home Mortgage Loan

By Sheryl Landrum Columnist

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Mortgage lenders have restricted access to many home mortgage loans by enforcing stricter guidelines. Now more than ever, good credit is imperative for a good home loan and bad credit may disqualify you. Let's review some of the ways you can improve your credit scores and secure a good mortgage.

  • » Payment history is still the key factor in maintaining good credit. Pay your bills on time and do not let a bill go passed thirty days due.
  • » The amount of available credit on your credit cards is key to maintaining good credit. Ideally, your balance on your revolving debt should be 25% or less of your available credit. Keeping it under 50% will also make a big difference in your credit scores.
  • » Length and breath with creditors is also ideal. Mortgage lenders like to see between 3 and 5 credit lines for their borrowers. A long term relationship and a good payment history with your credit card will be reflected in high credit scores. Do not close out credit cards with creditors you have a good relationship with. Also, do not open too many lines of credit at once as this can drop your credit scores.
  • » The type of credit you have is also reflected in your credit scores. Credit taken where interest, and or payment, is deferred for a year is considered high risk and will lower your credit scores.
These simple credit basics can help you to develop and maintain good credit--the true path to a good home mortgage loan.

About the Author
Sheryl Landrum is a Senior Loan Officer with First Capital Mortgage in San Diego, California and a freelance writer on mortgage issues.

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