Your credit score is extremely important in determining your buying power. It’s a number that comes up quickly as buyers are readying themselves to get pre approved for a mortgage. Sometimes buyers are sent off to work on repairing their credit for a few months or years before they actually buy.
And even while they’re out there looking for homes, possibly even after they received their mortgage pre-approval letter, they will need to watch that credit score and make sure they don’t do anything to negatively impact it.
Here’s some good information to know if you are trying to keep or get a high credit score (aren’t we all?)
A mortgage broker I work with recently had a client who was upset about his drop in credit score. He bought a house in the summer and a car in the fall and his score was impacted significantly. Here’s why.
IMPACTS TO CREDIT SCORES
35% payment history
15% length of history* typically takes 12 months of history to be a positive influence on score.
10% new credit
10% types of credit used
30% amount owed (% of credit used vs. credit available)
So, when you get new credit (car, mortgage) it actually affects 25% of the score formula because you get ‘hit’ for both new credit and length of history.
Keep that in mind as you watch your buying patterns and how they affect what your (ever so dynamic) credit score is!
And if you’re looking for a home for sale in Metrowest Boston, give me a call – I’ll walk you thru the complexities of the pre approval process and help you with any credit corrections that will need to be made to get your buying power where it should be!