When you apply for a mortgage, it is paramount that you have good credit. And while you need a minimum credit score of 600 to qualify for most loans, some mortgage companies in Georgia are willing to work with you even if you have a lower score. However, along with evaluating your creditworthiness, these companies will also review other elements of your credit report including judgements, collections, liens, trade lines and previous applications when deciding whether to approve you for your loan.
At BrightPath, our specialists will provide you with the advice you need to improve your credit report.
Judgements, Collections and Liens
Traditionally, judgements, liens and collections are listed at the top of your credit report. This is one of the first sections reviewed by mortgage companies in Georgia. And the more items that are listed, the less likely you are to be approved for your mortgage. As a result, you should pull your credit report before applying for a loan and correct any concerns before submitting it to mortgage companies in Georgia.
Judgements refer to costs that a court has ordered you to pay and often includes fees related to unpaid child support or unsettled collections accounts that have been submitted to a court by a lawyer. The best way to resolve these judgements is to pay off the full remaining balance to get it expunged from your report.
Collections are any unpaid bills or credit card fees that have been sent to collection agencies to recoup payment. Go back through your older credit card statements and utility bills to ensure there are not any remaining balances that could be lingering and affecting your credit score.
Liens are a type of tool used by creditors to protect their investments by claiming your assets as debt collateral. These can include real estate liens, construction liens and judgements liens. When they are filed involuntarily, your creditor reports this information to the credit bureaus so that it will be reflected on your report. To resolve these liens, maintain a strong payment history while keeping the balance on your credit cards low.
Mortgage Companies in Georgia Assess Your Trade Lines
Trade lines refer to car loans, credit card accounts, lines of credit and other credit vehicles. When mortgage companies in Georgia review your trade lines on your credit report, they will be assessing your total debt to income ratio. Should your report reflect a debt amount that is significantly higher than your income, you will have more difficulty getting approved for a mortgage, even if you have an excellent credit score.
Mortgage companies in Georgia will also make note of how close your revolving debt like lines of credit and credit cards are relative to your credit lines. Ideally, your lines of credit and credit cards should be halfway or less to their limit when you submit your report.
Mortgage Companies in Georgia See Previous Applications
Towards the bottom of your credit report, there is a section that lists your former credit inquiries. While reviewing your credit score has no bearing on this, if you have previously applied for several credit cards and loans, it will be viewed unfavorably in the eyes of mortgage companies in Georgia. As a result, refrain from opening lines of credit or credit cards in the lead up to applying for your mortgage.
At BrightPath, Our Specialists Will Give You Guidance to Improve Your Credit Report
The specialists at BrightPath understand exactly what mortgage companies in Georgia look for when approving you for your loan. As a result, they will answer any question you may have and guide you through the process so you can get into the beautiful new home you have always wanted.
Contact us today to schedule your consultation.
The specialists at BrightPath will use their knowledge, professionalism and passion to provide you with optimal results.