Need to Improve Your Credit Score for a VA Loan in Houston?

Clearlending

You might have heard your friends hired services that promised to increase their credit scores. But has anyone got a successful result out of it? Most of such services end up taking away your home. When your credit score is not anywhere near the fair range, you are most likely to fall back on shortcuts. Also, many buyers do not have an idea how to pull their credit scores. If you also want to increase the score before applying for a VA loan process, you can do it manually.

The credit score is a crucial part of a home-buying journey. The first thing is that you need to start monitoring credit reports. This simple step helps to find out the issues that pull down your credit scores. Now, the minimum credit benchmark for a VA loan is 550. However, such a low score might not fetch you the best scores. For the lowest credit scores, you should work on improving the credit score. After all, the difference between having a 600 credit score and a 680 credit score might cost you thousands of dollars.

So, the article further explains the essential information about improving your credit score for VA loan in Houston. Let’s take a look below.

Know when the payment history is reported

You can call the issuer and find out the closing date. The closing date refers to the last day of the billing cycle, and this is not the same as the due date. You must have heard of the credit utilization ratio, and it is a comparison between available credit and used credit. The best way to increase your credit is that you must keep the credit utilization rate below 10%.

Nevertheless, when you pay off the balance also matters. Even though you pay the balance off per month, it can negatively impact the credit score. This happens when you pay off after the reporting date. Therefore, it is important to pay the bill right before the closing date. In this way, the reported balance is likely to be zero or low. The FICO system will take the low balance into account.

Rebuilding might take some time 

If you are thinking of increasing your credit scores within a week, this can be far from impossible.  Developing a good credit behavior may take at least 3-6 months. Things can speed up only if you have only one late payment or another minor issue. It is generally difficult to calculate how long the credit repair is going to take. Bankruptcy, frequent credit applications, late payments, and maxed-out cards: these are the major issues to solve. Also, rebuilding bad credit is more time-consuming than building a good report.

In the end, sorting out good credit is worthwhile. You can save thousands of dollars on the interest rates. If you do not have a credit score, you can always get started. With positive credit history, you can manage a better interest rate for mortgages. So, pay attention to your credit score for the VA loan in Houston!

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