A credit score is a mathematical calculation that assigns a number for you between 300 (worst scenario) and 850 (best scenario). This number is used to determine an individual's credit worthiness and the likelihood that you will pay your debts. The lower your score the “riskier” lenders view you therefore the harder you'll likely find it to get a loan.
VA Loan Providers typically shy away from anyone with a FICO Score lower than 620. Even though a score of 620 is the lowest threshold most lenders will consider 680 is what you should shoot for. For those looking to take advantage of buying a home at historically low prices this could impact your ability to get your dream home while prices are low. Or, for those paying higher interest rates than currently available, this could limit your ability to refinance.
The good news is if your score is less than favorable there are some immediate activities that you can take to improve it:
Overall, there is no silver bullet that impacts your credit scores. It's always best to practice good financial management. Living below your means by not spending more than you take in, limiting credit card balances, and paying your bills on time are good fundamentals that provide for a solid credit foundation.
Sound Off...What do you think? Join the discussion...