Darin and Christina Cunningham | Re/Max Elite
278 Franklin Road Suite 190 | Brentwood, TN 37027
Office: 615.661.4400 | Fax: 615.661.4115
Christina: 615.394.4168 | Darin: 615.456.4086

3 Ways Bad Credit Can Affect Your Mortgage Application

3 Ways Bad Credit Can Affect Your Mortgage ApplicationThere are many factors that can affect your mortgage application. When you apply for a mortgage loan, your credit report and credit score have significant influence over a lender’s decision to approve your mortgage loan application. Lenders want to see that you are creditworthy and have a good history of repaying your debts. At the time of your mortgage application, your goal should be to present the best financial picture of yourself to the lender. Read more to learn what credit problems can potentially result in a mortgage lender denying your loan application.

Poor Credit from Your Spouse

If you have perfect credit and your spouse has poor credit, this can hurt your chances of getting a mortgage loan through a joint application. If you are unsure about the status of your spouse’s credit, it would be wise to discuss it together. Once you have an idea of their credit history, you can both evaluate if a joint application will be beneficial in obtaining your mortgage loan. In a joint application, both of your incomes, credit histories, and credit scores are used in reviewing you and your spouse’s creditworthiness. If your credit is less than perfect, your credit history may not be enough to offset the risk of your spouse’s.

Credit Information Time Frames

The Fair Credit Reporting Act states that credit bureaus must remove most entries in your credit report after seven years. For some people, this could be a bad thing. If you recently missed a payment or have bankruptcies, judgments, and tax liens on your credit report, then it might be best to wait a few years before you apply for a mortgage loan. Even if you are on time and have paid off your debts, past entries can come back to cause your loan to be denied. For most people, it is easy to forget small instances like multiple missed payments especially if they have a good credit score now.

A Low Credit Score

To get a full picture of your credit, mortgage lenders pull your FICO credit scores from all three credit bureaus. Your FICO score is your formal credit score as calculated by the Fair Isaac Corporation and is a factor in assessing your credit risk. If your credit score is below 600, your lender may turn down your mortgage application. Some reasons for having a low credit score may be from high credit card balances, late payments, and the debt-to-limit ratio.

Become a Homeowner with the Expertise of Darin and Christina.

No one knows the home-buying process in the greater Nashville area better than Darin and Christina Cunningham of Re/Max Elite. With their experience and expertise, our team can help you navigate through the details of your mortgage loan application and offer advice the best ways to get approved. To learn more about how we can help, call us today at (615) 661-4400.

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