C is for Credit

It is common knowledge that you need good credit to qualify for loans, credit cards and other financial borrowing programs. This rule follows with all home loans and all types of home finance. Lenders want to see good credit before they can trust you enough to lend you a mortgage. Once approved for a loan, your credit history also determines the loan rate you can be granted. Okay, so what is good credit?

Usually good credit just means that you do not have outstanding balances on any of your credit accounts. It also means that you do not have a lot to owe back to other lenders, and that you have paid your bills in a timely manner in the past.

Lenders evaluate credit by looking at a couple of things. First, they make sure you seem to have good credit. Then they might look further at what is considered your credit risk. This can be determined in several ways, but it is meant to predict whether or not you will be able to pay back your loan completely and make the payments on time throughout the course of the loan.

Credit risk is generally measured by various records, including income, assets, liabilities, payment history, credit reports, debt-to-income ratio and other financial information.

Although good credit and credit risk seem to be one in the same judgment, you can have good credit and still be considered at credit risk. One scenario where this would occur is if a couple applying for a loan had very low income and no credit history.

Obviously, risk does not determine you are unfit for a loan and nothing can promise what the future holds. This is why Countrywide thinks your present and future are most important.

Dedicated to helping you get that loan and buy your home, the professionals at Countrywide can go over your credit with you and give you the financial advice and information that you need to secure the funding you are seeking.

Also be aware that you can easily obtain a credit report by contacting Equifax, Experian or TransUnion online or by phone. In most states, you have the right to receive a free credit report once a year.