One of the main factors affecting your application for a mortgage loan in Orlando, FL, is credit score; it is a criterion lenders look into to determine whether or not your application merits approval. The chances of getting favorable deals are better with a healthy credit score. Therefore, if you are applying for a mortgage loan, it is recommended, among other factors, to check your credit score.

Credit score guide

A credit score between 690 and 719 is considered good; 720-860 is excellent. However, when a credit score is between 300-689, it needs improvement.

Now, the question: what influences credit score? There are several areas to consider, but the two factors having the most influence are credit utilization and payment history. The first pertains to how much of your available credit you use; the second refers to your record of paying your bills.

Improving your credit score

Before you apply for a mortgage loan in Orland, FL, it is imperative to look into your credit score to ensure it is within a good credit range. If it needs improvement, consider the following:

• Paying the bills on time – a missed or late payment does have a negative implication on a credit score, which can stay on your credit report for up to seven years. Remember, paying on time will reflect on your payment history, which will help improve your credit score.
• Keep credit accounts open – when your older credit card companies do not impose high fees or render poor service, keep your accounts with them. Why? Closing an account affects your overall credit limit, which, in essence, drives up your credit utilization.
• Below 30% credit utilization – keep your credit card balances well below your credit limits. Utilization under 30% improves your score. As mentioned earlier, closing a credit account can increase your utilization rate as it decreases your credit limit. For example, if you have two credit cards, and you suddenly cancel one without changing your spending habits, it could increase your credit utilization, possibly more than 30%, which could negatively impact your credit score.

Again, a credit score is one of the main factors that helps determine whether or not your mortgage loan in Orlando, FL, merits approval.

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