In today’s difficult economic times this is a question I hear very often. To answer this question I decided to set up an interview with a local loan originator. His name is Jason Gravelle he is the branch manager for Advance Mortgage Services in Braintree, Jason specializes in residential financing specifically on the south shore, Weymouth, Braintree, Quincy, Norwell, Hingham and all other areas.
When I sat down with Jason my first question was how important is your credit score in getting a loan?
Jason’s response was that your credit score is the foundation of the financial processes, it will determine not just what interest rate you will be given but also what loan programs you may be eligible for. He went on to say credit score is a reflection of time, if you pay down credit card balances, your score should go up and the opposite, you increase your credit balances closer to your credit limits your score goes down.
My next question was how will your credit score reflect (affect ?) your interest rate?
Jason’s response was your score indicates ones credit worthiness. Each one of
the 3 credit bureaus have scoring modules. In general their modules are very similar but they do have differences on what they value as important in ones credit profile. Your credit score is the starting point in the financial loan process because it first establishes what loan programs one can qualify for. And now (unlike the not so long ago past) it will have a direct impact on what your interest rate will be. This effect is issued down to the mortgage lenders by Fannie Mae and Freddie Mac. So you will experience these credit score impacts at every bank that secures loans for sale to the secondary market for which loan guidelines are mandated by Fannie and Freddie. In other words, these rate/credit score impacts are industry wide, from Hawaiito Maine.I asked what can one do in order to improve their score?
the 3 credit bureaus have scoring modules. In general their modules are very similar but they do have differences on what they value as important in ones credit profile. Your credit score is the starting point in the financial loan process because it first establishes what loan programs one can qualify for. And now (unlike the not so long ago past) it will have a direct impact on what your interest rate will be. This effect is issued down to the mortgage lenders by Fannie Mae and Freddie Mac. So you will experience these credit score impacts at every bank that secures loans for sale to the secondary market for which loan guidelines are mandated by Fannie and Freddie. In other words, these rate/credit score impacts are industry wide, from Hawaiito Maine.I asked what can one do in order to improve their score?
Jason’s response was to have at least 3 credit trade lines open to you at all times. If you don’t’ have credit tradelines available for you to use, then the credit bureaus don’t have the means to determine your credit worthiness. So if you have no credit tradelines open, you will not have a credit score. Which in today’s credit loan environment, can prove to be detrimental. And in maintaining your credit on an ongoing basses don’t be more than 30 days late on your payment deadline and keep your balance at or under 30 % of your allowed credit limit.I hope you found my interview helpful and informative. I think that we all now understand the power of your credit score. If I can answer any of your questions, show you a home, or help you sell a home – feel free to contact me, John Connolly, at john@johnconnolly.com.
If you want to learn more about the affects of your credit score or about getting pre-approved for a loan please contact Jason at jason@jasongravelle.com or call him 617-620-9440.
You can also connect with Jason on…
Facebook: http://www.facebook.com/profile.php?id=1128667391
or LinkedIn: http://www.linkedin.com/pub/jason-gravelle/1/649/827