6 Tips to Boost Your Credit Score for Kentucky Mortgage Loans (FHA, VA, USDA, KHC)

6 Tips to Boost Your Credit Score for Kentucky Mortgage Loans (FHA, VA, USDA, KHC)

If you’re looking to buy a home in Kentucky, having a solid credit score is essential for qualifying for popular mortgage programs like FHA, VA, USDA, or KHC loans. Here are six actionable tips to improve your credit score and increase your chances of getting approved for your dream home loan.

1. Pay Your Monthly Bills on Time

Here are six tips for improving your credit score for a fresh financial start 

1. Pay Your Monthly Bills on Time
Paying monthly bills is a necessary chore that has a definite effect on your credit score. According to the FICO scoring model, your payments account for as much as 35 percent of your total score. Create reminders for due dates or establish a calendar for yourself to ensure you get everything paid on time.

2. Reduce Your Debts
Got credit card debt? Start paying it off now. Part of your credit score is based on the amount of available credit you have, known as your credit utilization ratio. So if you're carrying high balances, you'll want to lower them as soon as possible. Create a personal budget with a goal of reducing your spending so that it's lower than your income. Then, use any monthly surplus for your credit card debts until they're gone for good.

3. Limit Credit Inquiries
Looking for a new apartment? What about a mortgage? In either situation, try and group your applications together as much as possible. Applications for new lines of credit will generate a "hard pull" on your credit, and having too many of them in a short period of time can lower your score. However, credit reporting agencies usually consider a group of applications within a short period of time as one pull, as long as they're in the same category.

Similarly, limit yourself to opening up no more than one or two credit cards per year, which also generate hard pulls. Even if you get a ton of offers in the mail for stellar sign-up bonuses, they're likely to be offset by the damage to your credit. FICO reports that new credit and credit inquiries account for 10 percent of your total score.

4. Don't Cancel Old Cards
Have a card you don't use anymore? Don't close it. This can negatively affect your score as it lowers your amount of available credit. Instead, use it about once per month and don't forget to pay the bills in full, and on time.

5. Request Credit Limit Increase
If you only have one card and you're constantly approaching your spending limit, call the bank and ask for an increase in your credit line. This will raise the amount of available credit, which will eventually improve your score.

6. Take Care of Late Payments Before They Hit Your Score
If you do happen to miss a payment, contact the card issuer immediately. If you have good history built up, the company may agree to not report your late payment. Even if you can't avoid a late-payment fee, be sure to get your account up to date as soon as possible so you can limit the damage.
Your credit score is yours to own. It reflects your financial history and helps lenders predict how you will manage your finances in the future. Due to the lingering effects of credit, you don't want to waste any time to improve your credit.

1 -  Email - kentuckyloan@gmail.com 

2.   Call/Text - 502-905-3708

Joel Lobb
Mortgage Loan Officer - Expert on Kentucky Mortgage Loans

 Website: www.mylouisvillekentuckymortgage.com
 Address: 911 Barret Ave., Louisville, KY 40204

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Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916

For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Credit Scores Required For A Kentucky Mortgage Loa...

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What is a Good Credit Score for a Kentucky FHA, VA, USDA, Fannie Mae Conventional KHC Mortgage Loan Approval?

What is a Good Credit Score

What is a Good Credit Score?

An established credit history and credit score often stands between potential home or car buyers and their dream. But What is a good credit score? What exactly is a credit score? What makes a credit score “good?” How to improve your credit score? If you’re new to building credit there are a few things you need to know in order to keep your credit looking stellar.

What is a credit score?
Your credit score is a numerical representation of your credit report. This three-digit number is like a badge that predicts risk, credit responsibility and determines your interest rates if you borrow money from lenders much like your CLUE Report. While you will be able to get a copy of your credit report you may not find this numerical key listed. Think of your credit score like the cliff notes version of your credit report. There are a few different measures of credit scores between divisions. Based on their own systems different scorers might view certain numbers in many ways.

what is a good credit score

Deciphering your three-digit credit score is quite easy if you know the levels. The range usually runs from 300-850. Good to excellent credit is considered anything from 700 to 850. If your credit score falls in this range you’re going great! Fair credit runs from 625-699, poor runs from 550-624, and anything below 550 is bad. Some finance experts would classify anything over 720 a good credit rating. Experts will disagree depending on their preferred credit rating systems, and in most cases the criteria you use to determine whether or not your credit score is good will not be far off.

What Does a Good Credit Score Mean?
Having a good credit score is great, but if you don’t know how to use it you could be missing out on some crucial credit building. Credit scores are used in varying ways by lenders and banks. One thing your credit score implies is how likely you are to pay back debt. Basically it announces how reliable you are as a borrower. People with good credit scores are more likely to pay back funds that they borrow while those with lower scores aren’t so reliable. Lenders like reliable borrowers, and good credit points them out.

But a credit score does much more than predict whether or not you’ll pay a loan back. When it comes to buying a house or car, there is an interest charge. Higher credit scores usually have a lower interest rate than those with bad to fair credit. Lenders not only base whether or not they’ll approve a loan by your credit score, but also how much interest to charge. If your credit is in good standing your interest rate won’t be as high as someone with bad credit. Your credit score saves you money with lower interest rates.

How is a Credit Score Calculated?
In order to build and maintain good credit you must first know how your score is determined. Once you know what goes into a credit score you can begin building your credit or nursing your score towards higher digits. Credit scores are based on your financial history only, and laws prevent your score being affected by things like race, gender, age and where you live. What is included are items such as your payment history, your current credit debts, age of your credit history, new credit items added to your accounts and types of credit used.

These five basic areas are where the bulk of your credit score is formed. All criteria have varying degrees of involvement in your score. For example:

• Payment history (35%) – How many on-time payments you’ve made, missed, defaulted and past due items
• Current amount owed (30%) – How much you currently owe – if you owe a large amount this could negatively affect your score
• Age of credit history (15%) – The average length of your credit accounts and time since last activity
• New credit (10%) – The number of new credit items on your accounts
• Types of credit (10%) – The kinds of credit accounts are you currently maintain

How to Improve Your Credit Score?
Many people avoid credit based on all the negatives they’ve heard against it, but neglecting your credit score hurts your chances of being able to make major purchases in the future. The best way to build credit is to use credit, and forming the following good credit habits early will pull your low score to higher ground.

• Pay bills on time – This is the easiest and best way to boost your credit score. Since the bulk of your credit score comes from your payment history, paying bills on time will pull you up quickly. Not only will that help, but a recent and consistent history of paying bills on time overshadow a period long in the past where you may have missed payments.
• Budget – Setting up a budget and staying within its parameters will keep you from overspending and using credit for frivolous things. Although using credit builds credit not being able to pay it off hurts more in the future.
• Use all your credit cards regularly – If you have a few credit cards try to use them from time to time in order to show that you use all of your accounts. Remember that the last usage of an account is 15% of your score.

Track a key aspect of your financial profile with your personal FICO® Score history graph. Simply navigate over any point of your score history and view the date the score was calculated. Check back each month to stay on top of changes.

Important items to note:

• We may not receive a new score for you each month. You won’t see a score if we did not receive one for a given month.
• Remember, FICO® Scores are based on data in your credit report, so changes to your score may be a result of changes in your credit report. You can request a free annual credit report from Equifax at www.annualcreditreport.com.

Please refer to our FAQs or Useful Links sections for more information.

FICO® Scores: What You Need to Know

Score Deciding Factors

35% payment history, 30% amount you owe, 15% length of credit history, 10% new credit opened, 10% type of credit.

 

Understanding Credit Reports and Credit Scores

When it comes to getting a home loan, does your credit report and credit score really matter? Can you use the free credit score you got off the internet to apply for a loan?  What if your credit score is low, can you get a mortgage? What if it is high, will you get a better interest rate? And what the heck is FICO?

So many questions. You’ve searched the internet and are still confused. If you are new to getting a mortgage and are overwhelmed by understanding your credit score you are not alone. Your credit score has a big  impact on your ability to qualify for a loan and get a favorable interest rate. Therefore, you should take the time now to understand it.

Here’s the good news. We’re here to explain things simply and clearly. Step by step we will walk you through all things credit. When we’re done, you’ll know what you need to know to understand how credit impacts your ability to get a mortgage so you can make smart home buying decisions.

Below are the important items we will discuss:

• What is a credit report?
• What do mortgage lenders use to determine my credit score?
• What does FICO stand for?
• What determines my FICO score?
• What’s a good FICO score?
• What if my FICO score is below 620?
• Can I get a copy of my credit report?
• Ah Ha! Now I understand all things credit and I’m this much closer to owning my home!

What is a credit report?

A credit report record’s your credit history including information about:

• Your identity: name, social security number, date of birth and possibly employment information.
• Your existing credit: credit card accounts, mortgages, car loans, students loans etc.including credit terms, how much you owe, and your payment history.
• Your public record: Judgments against you, tax liens or bankruptcies.
• Recent Credit Inquiries: Requests for your information from companies extending credit such as credit card companies, auto loans, etc.

Be aware, credit card companies, car companies and mortgage lenders use slightly different models to determine credit risk. Today we are focusing on Mortgage related credit.

How do lenders calculate my credit score?

Your credit score is the key to your castle. Your home is most likely the most expensive purchase you will ever make. Therefore, when buying a home, lenders use a different system for assessing risk than credit card companies or even auto loan companies use.

Mortgage lenders use a comprehensive system of checking credit called a Residential Mortgage Credit Report (RMCR), commonly called a “Tri-Merge” report. The RMCR report combines your three credit reports from the three national credit bureaus, Equifax, Experian, and TransUnion. Each credit reporting agency calculates your credit score or FICO Score differently. Therefore, pulling from all three bureaus gives lenders a more complete picture of your credit behavior.

Once pulled, lenders use the average of these three scores, usually the middle score, to determine loan qualification and interest rate. For example, if Equifax gives you a 720, Experian a 730 and TransUnion a 740, the lender will use the 730 FICO Score to help determine the terms of your mortgage. If you are applying for a loan jointly, your partner’s three reports will also be pulled.

What does FICO stand for?

FICO stands Fair, Isaac and Company. Over 25 years ago, lenders began using FICO’s scoring model, or algorithm, to fairly and more accurately determine a person’s credit risk. Since it’s inception, FICO’s continually updates its’ algorithms to reflect more current lending trends and consumer behaviors. Today, FICO Scores are used by over 90% of enders. Importantly, your FICO score can impact your loan interest rates, terms, approvals and more.

What determines my FICO score?

A Mortgage FICO score is determined by an algorithm that generally looks at five credit factors including payment history, current level of indebtedness, types of credit used, length of credit history and new credit accounts.

What’s a good FICO score?

To qualify for a conventional loan, most Mortgage lenders require a FICO score of 620+. The best interest rates go to borrowers with a 740+ FICO score. For each 40 point drop, borrowers can expect to see a slightly higher interest rates by about 0.2 percentage points.  If a borrower drops below 660, the increase is likely to be twice as big, a 0.43 percentage point increase. If your credit score is below 620, it is very difficult to get a conventional loan in today’s marketplace. However, don’t be discouraged. You may still be able to buy a home.

What if my FICO or credit score is below 620?

If your score is below 620, you may still be able to buy a home. There are several options:

• Put more money down. Some lenders offset a weak credit score with a higher down payment. A higher down payment gives you more equity in your home, lowering the lender’s risk.  
• You may qualify for a non conventional government issued loan such as an FHA, Veterans Affairs and/or U.S. Department of Agriculture loan which have less stringent lending requirements.
• You may work to get that credit score up!
  • Correct any errors on your report. Analyze your credit items line by line. If you notice a mistake, dispute it right away with either the credit bureau providing the report or the company that providing the incorrect information to the credit bureau.
  • Make all your payments on time. Late payments are the No. 1 way to lower  your credit score.
  • Pay down revolving debt. Keeping your credit balances low helps to raise your score.  
  • Sit back and relax. As long as you're paying down debt and making payments on time, your credit score will eventually rise on its own.

Can I get a copy of my credit report after a lender has pulled it?

Yes! In fact, you can get one free credit report every twelve months from each of the nationwide credit bureaus—Equifax, Experian, and TransUnion. You may also purchase your credit score at any time from any of the credit bureaus. Some Mortgage lenders will tell you your score when you apply for a loan or even give you a copy of your report but they are not required to do so. However, if a lender denies you credit, under the Fair Credit Reporting Act (FCRA) you are entitled to a free copy of your personal credit report if you have received notice that in the past 60 days you have been declined credit

Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.

10602 Timberwood Circle 

Louisville, KY 40223

Company NMLS ID #1364

Text/call:      502-905-3708
email:          kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

Text/call 502-905-3708 kentuckyloan@gmail.com

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/

-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

We’ve dropped our minimum FICO score to 620 for Kentucky Mortgage Loan Approvals

We’ve dropped our minimum FICO score to 620 for Kentucky Mortgage Loan Approvals for FHA, VA, USDA and Conventional Mortgage Loans in Kentucky!

Now that’s refreshing!

Call me today to qualify your borrowers with one of our great programs:

KENTUCKY FHA MORTGAGE LOANS

Minimum credit score
620 AUS approved
640 manual
Non-Credit Qualifying Streamline refinances allowed
Gift funds allowed for down payment and closing costs
Cash out 80% LTV

KENTUCKY VA MORTGAGE LOANS

Minimum credit score
620 AUS approved
640 manual/640 High BA
Cash-out up to 90% LTV
Foreclosure/Short Sale/Bankruptcy <2 allowed="" approval="" aus="" p="" with="" years="">
KENTUCKY RURAL USDA MORTGAGE LOANS

Minimum credit score: 620
100% maximum LTV
Manual Underwrites
No maximum loan amount
Rate/Term refinances allowed


KENTUCKY CONVENTIONAL MORTGAGE LOANS

620 min score
Fannie Mae
Freddie Mac
Standard and High Balance
HomeReady
HomePossible

Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.

10602 Timberwood Circle 

Louisville, KY 40223

Company NMLS ID #1364

click here for directions to our office

Text/call:      502-905-3708

fax:            502-327-9119
email:          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

Credit Inquiries--How much do they effect my score?

Credit Inquiries Are A Formal Process

A "credit inquiry" is a formal request to review a person's credit report.

Credit inquires are grouped with other traits into a credit-scoring category called "New Credit". New Credit represents 10 percent a person's complete credit score.  On the scale of 300-850, therefore, credit inquiries represent a tiny portion of a maximum of 85 points to a FICO.

There are many times of credit inquiries, but really only 4 of the set can impact a person's credit score:

1.    A credit check for a mortgage loan

2.    A credit check for an auto loan

3.    A credit check for a credit card application

4.    A credit check for a store credit card, or consumer loan

These 4 types are singled out because, in each case, the inquiry is made by the applicant in order to get access to more debt.  Because extra debt increases the probability of default, credit inquiries can sometimes foreshadow trouble.

Even then, however, the risk of default varies by application type.

For example, credit card applications can be more damaging to a credit score than a mortgage application.  This is because credit card debts tend to revolve higher over time versus a mortgage which eventually pays down to $0.

So, all things equal, a credit card application will harm your credit score more than an application for a home loan.

A Credit Inquiry Lowers Your FICO By 5 Points

When compared to the other credit scoring elements, Credit Inquiries is a relative nothing.

In the official FICO scoring model, Payment History and Credit Utilization account for 65% of a score, combined, and the amount of time during which you've had credit to your name accounts for 15%.  These three areas are over-weighted because the bureaus are more concerned with what you've already done with your credit versus what you might do with more of it.

Your credit past is the best clue to your credit future and it's one of two reasons why it's okay to give your social security number to as many lenders as you want. The impact of a credit inquiry is tiny next to the value of being a Model Credit Citizen.

A mortgage credit inquiry is estimated to lower a credit score by just 5 points.

Unfortunately, we'll never know for sure because the very act of examining the credit score causes it to move. In Chemistry, this is called the Heisenberg Principle.  On MTV, it's called The Jersey Shore Syndrome.  Put a camera on something, and it changes.

The Credit Bureaus Don't Hit Your FICO Twice

The second reason you should shop around with lenders is that -- unlike applying for multiple credit cards -- applying for multiple mortgages won't count as multiple, consumer-initiated inquiries. This is a common thing.

You might apply for 5 credit cards and use them all. You're not going to be approved for 5 mortgages.

As such, the credit bureaus have made it formal policy to permit "rate shopping".  Talk to as many lenders as you want in a 14-day time frame; have your credit checked as often as you'd like; compare rates and fees.  All of the inquiries will be lumped into a single application.

It's good for you and it's good for the bureaus. Your credit scores stay high and TransUnion, Equifax and Experian collect more fees from the banks.

Advice From The Credit Bureaus On Getting Low Rates

To promote rate shopping and to lessen The Fear of Credit Inquiry, the people behind the FICO brand spell out for you the best way to get the best mortgage rates possible:

1.    If you want the best rate, you should "shop around"

2.    Limit rate shopping to 14-day timespan to keep your credit scores high

3.    Mortgage lenders can't give accurate rate quotes without a credit score so give up your social security number

Metaphorically, not letting your lender see your FICO is like not letting your doctor check your blood pressure. You'll get a diagnosis when the appointment is over -- it just might not be the right one.

Joel Lobb

Senior Mortgage Loan Officer

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Joel Lobb
Senior  Loan Officer

(NMLS#57916)

American Mortgage Solutions, Inc.

10602 Timberwood Circle, Suite 3

Louisville, KY 40223

 phone: (502) 905-3708

 Fax:     (502) 327-9119

kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

Fill out my form!

Kentucky Mortgage Loan Approval for USDA, FHA, VA, and Fannie Mae with a previous short sale or foreclosure. How long do you have to wait?

Obtaining new financing after a Short Sale or Foreclosure for a Kentucky USDA, FHA, VA, and Fannie Mae Loan?   Kentucky Mortgage Short Sale: Conventional Loans Require: Minimum 2 years with restrictions up to 7 years 2 to 4 years - 80% maximum LTV 4 to 7 years - 90% maximum LTV 7 years and after allow for maximum standard financing Kentucky FHA and Kentucky VA Loans Require: 3 years, with exceptions possible for less time if borrower's credit and mortgage payments were in good standing prior and up to date of Short Sale   Kentucky Mortgage Foreclosure: Conventional Loans Require: 7 years, with exceptions considered between 3 to 7 years if significant extenuating circumstances exist Kentucky FHA and Kentucky VA Loans Require: FHA: 3 years, with exceptions possible for less time if significant extenuating circumstances exist VA: 3 years, with exceptions possible for less time if significant extenuating circumstances exist

Please contact me for a free mortgage pre-approval or with questions!

Joel Lobb
Senior  Loan Officer

(NMLS#57916)

American Mortgage Solutions, Inc.

800 Stone Creek Pkwy, Ste 7,

Louisville, KY 40223

 phone: (502) 905-3708

 Fax:     (502) 327-9119

kentuckyloan@gmail.com

 Company ID #1364 | MB73346

http://mylouisvillekentuckymortgage.com

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