• A high credit score is not good enough to get a mortgage.

    When a bank looks at your credit when applying for a mortgage, they do more than just look at the score. Don’t get me wrong, score is very important. But it’s like a book cover – you can’t judge the contents without opening it up.

    Here are some of the things a credit bureau can show that you cannot tell just by the score alone:

    1. Lots of debt. You may be doing everything right and paying all your bills resulting in an excellent credit score. But if you have a pile of unsecured debt, it can greatly reduce the amount you will qualify for.

    2. Lack of trades. Each credit card or loan is called a “trade”. The banks want to see that you have at least 2-3 trades.

    3. Length of trades. The banks want to see that you have been using your credit responsibly for at least 2 years.

    4. Bankruptcy. Believe it or not, you can have an excellent score with a bankruptcy on your record. Not good.

    5. Collections. You may have an excellent score with one or more collections on your record. Those will generally need to be cleaned up prior to receiving a mortgage.

    6. Irresponsible usage. Generally speaking, using your credit irresponsibly will drop your score, like paying bills late. But it is still possible to have a good score. Banks are very strict about certain things. For example, you may have a series of late payments on only one trade. If that trade happens to be a mortgage – not good!!!!!!

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