How exactly does a credit rating fit into qualifying for a mortgage?

Of all the factors that go into qualifying for a mortgage (income, assets, job stability), credit rating is the one factor that seems the most difficult for many to overcome. Luckily it is the easiest to improve! Here are the most misunderstood facts regarding credit:

• Lack of credit prevents many from qualifying. While many prefer to pay cash, if you want to qualify for a mortgage you must be able to demonstrate you have the ability to borrow money and pay it back on time. Establish credit for maximum score increase.
  
• Keep your credit card balances low. Balances near the credit limit can hurt your scores 50 points or more. Keep the balances less than 20% of the high credit.
  
• Paying off old collections may drop your scores. Leave them alone and concentrate on paying new, established credit on time.
  

I would be happy to discuss more credit improvement ideas with you. Contact me today to help you on the path to homeownership!