Purchase Order Finance

Today’s mortgage lenders care about one number more than any other: your credit score. If this figure is high enough, lenders will give you a mortgage loan that comes with the best interest rates. If it?s too low, they won?t give you any mortgage at all.

Your credit score, also known as your FICO score, is a single number that tells mortgage lenders how well you’ve managed your money in the past. It tells them whether you’ve paid your bills on time or if you’ve run up your credit cards. It will include any bankruptcies you’ve filed.

If your credit score is a good one, one that is above 700, most mortgage lenders will approve you for a loan with the lowest possible interest rates. But if your score is a weaker one, though you might still receive a mortgage loan, you?ll certainly be forced to higher interest rates. Lenders do this to shield themselves from the extra risk they taken on by lending money to borrowers who have a history of missing payments.

Fortunately, you can boost a weak credit score. This takes time, though. Despite what you may hear from companies in radio and TV commercials, there is no quick way to erase bad credit. Improving your credit score takes time and effort.

First, contact the credit-reporting agencies that handle credit scores, Experian, Equifax and TransUnion, and order your credit report from each of them. Study each report, being on the lookout for possible errors. If you find any errors, immediately report them to the bureaus.

Erasing reporting mistakes will help improve your credit score. Unfortunately, this, too, is a long process. It will take a long time for the bureaus to amend your credit report.

If you find no errors, you?ll then have to take on the real hard work: improving your own financial habits.

Start by paying your current bills on time. Make sure you have no more late payments. Then pay off the balances on your credit cards. Close the credit-card accounts that you’ve paid off.

If you do this for a long enough time, your credit score will slowly improve. The key word here, though, is ?slowly.? It takes a long time to repair a damaged credit score. If you expect immediate results, you will be disappointed.

If your credit score is currently weak, it might make sense to wait for a year or more before applying for a mortgage loan. That will give you the time you need to establish the healthy spending habits that will boost your credit score.

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