Wednesday, April 20, 2016

4 Ways to Repair Your Credit

In recent years, the ups and downs of the economy have caused a major credit crisis situation for many people. For those people looking to get approved for a mortgage loan, this can be a major issue. Your credit score is a large determining factor in the loan approval process. Repairing and maintaining a good credit score will improve your chances of getting approved for a home loan at the Lake of the Ozarks. Here are 4 ways to repair your credit:

1. Know Your Credit History

When you submit an application for a home loan, your mortgage lender will be checking several factors including your credit history, job history and your debt-to-income ratio. Knowing your credit history and current credit score is the first step in repairing your credit. Your FICO score is a type of credit score that lenders use to assess your credit risk. In order to get a good interest rate on your loan, your FICO score should be at least 720. If your score is lower than 720, you will want to find what is causing your score to be brought down and try to fix it. If the problem is that you have not established sufficient credit, speak with your Lake of the Ozarks mortgage lender to find the best approach to get you in range for the best interest rate possible for you.

2. Pay Off Delinquent or Past Accounts

Having a good track record of paying off your accounts is something that a lender will be looking for. Outstanding delinquencies will give you a bad reputation for paying on time or missing payments all together. Before submitting a mortgage application, you should make sure to pay off any delinquent accounts. This will make your lender more confident about lending you the money and ensure your best chances at getting approved for a mortgage at the Lake of the Ozarks.

3. Adjust Your Debt-to-Income Ratio 

Your debt-to-income ratio shows how much you owe in debt compared to the amount of money you bring home in income. If you currently have a high debt-to-income ratio, a mortgage lender will be concerned about your ability to make your mortgage payments. If you can adjust your debt payments to 36% of your income or less, you will be in a good position to afford your mortgage payments. According to, the ideal front-end ratio should be no more than 28%.

4. Do Not Acquire New Debt

If your debt-to-income ratio is good, leave it that way. Just because you can afford something new does not mean you should. Avoid acquiring any new debt until after you have closed on your new home and know you can handle the added expense. Acquiring any new credit cards or lines of credit will trigger credit inquiries, which should also be avoided before and throughout the mortgage loan process.

While there are many factors that affect your ability to get a mortgage loan, your credit will be the major determining factor and will have a major impact on your interest rate. Doing everything you can to get your credit score at 720 or above is your best chance of getting that dream home that you want. Once you have brought your score back up, or if your score is already good enough to apply for a loan, safeguard that score by making all your payments on time.

Having a good credit report gives you a better chance at a great interest rate on a new home. Don’t let anything stand in your way owning your dream home. When it comes to your Lake of the Ozarks home financing needs, I'm here for you every step of the way, to answer any questions that you may have. I'll discuss financing options, offer competitive interest rates and back it up with the first class service you deserve! Call your local Lakelender, Michael Lasson, at 573-746-7211 for all your home loan needs.

For Lake area news, resources and tips on financial services, please 

Michael Lasson
Sr. Residential Mortgage Lender
NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B
PO Box 1449
Lake Ozark, MO 65049

Direct:  (573) 746-7211


**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

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