What is the integral component of your mortgage application? Yes, the credit score holds great importance for the home-buying process. If your credit score is lower than the lowest benchmark, you might face rejection. You might have been worrying about whether the loan process is going to take a different route due to your loan option. Confusing thoughts aside, a DACA mortgage lender is going to put a focus on the credit score.
Since you have been hearing so much about credit scores for years, different myths have occupied your mind. How do you manage to carry perfect credit scores for the DACA mortgage loans in Houston? The very first step to continue the process is to look after your credit report. Along with it, debunk the myths that have been impeding the process at the same time. Once you understand where you are, you can take further actions to meet the required credit score. Clearing out the myths can be a pivotal way to ease the process. Especially when you have already faced issues for not being able to choose an FHA loan, you need to be extra careful. Let’s debunk the myths and look at the facts below.
Myth #1: Shopping for a loan pulls down credit scores
Shopping around does not hamper your credit scores. Had you been shopping around, you could save thousands of dollars. There is a great opportunity to find a cheaper DACA loan from a local lender! Before undertaking the process, get rid of debt. You should work on boosting your credit score. Pay the bills on time and eliminate outstanding balance for the best result. When you are confident with your credit score, start shopping around.
Myth #2: Balance on credit card improves credit scores
A significant part of the FICO score is based on what you have in your credit. Then another part of the credit score depends on what you have utilized. The credit utilization ratio is important to figure out and make sure it remains low. Pay off the whole balance, strengthen the credit scores, and keep the ratio low. If you pay off the credit in full, you can boost the credit score. Since FHA loans are not available for DACA recipients, the borrowers need to carry decent FICO scores. You can close a credit score and manage your expenditure. Be careful about closing an account and try not to tip off your credit utilization ratio.
Myth #3: Only three companies can offer credit reports
TransUnion, Experian, and Equifax are three credit companies that are popular across the nation. There are other companies that provide credit reports. Gather transaction history and employment history from these credit reporting companies too. You can find a company which offers a free report every year. On the other hand, some of these companies charge for the reports as well.
It is better to collect a full overview of your credit score and start finding a DACA lender. Not every lender offers the DACA mortgage; you should undertake the process ahead of D-day.