Maintaining GOOD Credit Scores Are More Important Than Ever!
With the upheaval that has transpired in the credit markets over the past few years, lenders are making less money available for higher risk Mortgages and the qualification standards for ” A “ Mortgages have risen and continue to rise.
During this time, the Federal Government decreased the maximum Mortgage Amortization from 40 years to 30 years and increased the interest rate you have to qualify at to the 5 year posted rate for Variable rate mortgages and mortgage terms of less than 5 years and made it more difficult for the Self-employed and those earning via commissions to qualify.
Some Banks, in recent weeks, have taken it upon themselves to start re-qualifying mortgages at maturity, instead of the old practice of simply renewing the mortgage for a new term.
The combination of all of the above are stacking the decks against aspiring home owners. It is now more important through High Credit Scores and payment history to show a history of successfully managing your debt obligations. This will get you ” A ” status, which in turn opens up more opportunities for success in achieving your dream of home ownership.
As if all that was not pressure enough, others are using Credit Scores as a means to judge character and risk.
Who else Reviews your Credit Score:
Insurance Companies
Many Insurance Company Underwriters, whether it be vehicle insurance, healthcare coverage, or many other insurance products, are beginning to use your credit score as a component in their calculation of your premiums. It may not be the major component of the calculation today, but it will and does factor in.
Employers
This may come as a shock to some, but some larger employers and employment agencies are using credit scores as part of their screening process. Financial institutions, jobs handling sensitive information, Retailer or jobs where the handling of cash is a primary role are using credit scores to judge character and future risk of hiring certain employees in addition to criminal background checks and driver abstracts for those using company vehicles as part of their jobs. A bad score may finger you as a potential security risk and therefore excluding you from many employment opportunities.
Small Business Lenders
Small business lenders will have to have your personal credit pulled, if you want to open an operating line, credit card account or lease equipment. For some small business credit, you may have to provide a personal guarantee for any debt incurred by the business.
Renting a Home or Apartment
Many landlords have minimum credit requirements for prospective renters If you don’t meet the minimum, they will not rent to you.
As rental vacancies decline, landlords will use your credit history to screen you against other applicants to determine the best candidate from all qualifying against their minimum credit standards.
As you can see, maintaining a good credit history is more important than ever. These are today’s realities. Maintaining a good credit history will always be important. Their truly is a very high cost to having bad credit.
And as a final note….the only thing worse than having a bad credit history, is having no credit history. If you are one of the few who have no credit history because you live on cash and budget your life accordingly, you need to get started on building a credit history.
Unsure What To Do Next?
Reserve Your Free No Obligation Consultation Today by completing the form to your right:
In your free consultation you will discover…
- How to ensure quick approval for your financing
- How to qualify for easy and comfortable monthly payments
- How to avoid the costly financing pitfalls
- How to get the required financing you need and deserve
- Which mortgage products you qualify for or best suite your needs
- What your Maximum Purchase Price
Helping all aspiring Home Owners Achieve The Dream of Home Ownership
