Are you looking for a home loan program? Don’t you have a good credit score? Well, you can get a home loan approval even with a low credit score. Though it is a little difficult to get a home loan approval with a 500 credit score, it is not impossible.
It is because there are lenders who offer 500 credit score home loans in Houston. Are you still not convinced? Are the myths preventing you from making a wise decision? Read on to know the myths and reality.
Myth 1: Checking credit report will hurt your credit score
No, it is not true. Getting your free annual credit reports will not hurt your credit scores and can be a crucial tool to make sure your information is up-to-date and accurate. Requesting your free annual credit reports or purchasing your credit reports will not affect your credit score. You can get your free credit reports every 12 months. Reviewing your credit reports will regularly allow you to quickly identify and fix any inaccurate information.
Myth 2: You can only have one credit score
Nope, you can have several credit scores. Multiple credit scores are available to you and lenders. Often, the score that you see is not the exact one as the one the lender sees. Your score bases on which credit reporting company provided the information used to calculate the score, the scoring model, the type of loan you are looking for, and even the day when it is calculated. It is because of this, it is quite normal to see slightly different numbers throughout the year and from different sources.
Myth 3: Carrying a balance on the credit card will improve the credit score
The reality is not so. Paying off your credit cards in full every month is the ideal way to improve a credit score or maintain a good one. Closing a credit card account can help you manage your spending and protect from identity theft in case you’re not using the account. It may make sense for your financial situation, however, don’t assume it will improve your credit scores. Keep this in mind that part of your credit score depends on your credit utilization ratio. You want to keep your credit utilization under 30 percent. If you close some credit card accounts but hold the same balance, you’ll be using a higher percentage of your total credit limit that could lower your scores. If you plan on closing an account, ensure to adjust your spending so you don’t increase your credit utilization ratio. If you decide to keep an unused credit account open, be sure to watch your statements to protect against identity theft and to check for unexpected fees.
Myth 4: Getting loan estimates from several lenders will hurt your score
No. Shopping around for credit and comparing loan offers can help you find the best terms and will not impact your score much if done in a short period of time. For most people, any negative effect on your score from multiple requests or inquiries for your credit score or report will be small, while the benefits of shopping around could be significant. You can also minimize any negative impact by doing all your rate shopping in a short amount of time.
As the reality is now uncovered before you, without waiting any more, opt for a mortgage lender and apply for a home loan today.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.