A Good Credt Score Isn't Always Enough

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Hi everyone. How are you! It is Leah Coss with the Mortgage Center. Another credit myth for you. If you have a good credit score, that doesn't necessarily mean you can get a mortgage. Many of you have great credit scores out there. But it doesn't mean that a bank wants to invest their money with you, reason being is the credit score is just basically a mathematical algorithm that the Credit Bureau has come up with.
And what it said is based on the credit that you do have and how long you've had that credit for, you have been making the payments on time and you are doing fine, therefore your credit score is good. But if your credit history only goes back six months, one year, a year and a half, that's not long enough for most banks or lenders. And they want a minimum of two years history. So that's the first thing.
The second thing is if you only have one credit line meaning one credit card or one line of credit or one car loan, or one student loan and just that, that's not overly impressing the banks. They want to see multiple lines on there to show that you can in fact handle it. They also want to make sure that if you have a credit card for example, and you only have one or two, you [inaudible] over $500. To say that you can manage $500 dollars is again not overly impressing a bank who is about to lend you hundreds of thousands of dollars.
So if you have a good credit score and you have been declined, that's probably the reason. But the good news is it is just time that you need to heal that. And when it comes to the five things that banks look at for buying a home, which you can check out in my other videos, they only want one weakness of those five. So if your credit score is good but your history is shallow, that one weakness can be overcome if the rest of your application is strong.
So there is potentially hope that you can still get approved now. Just give me a call and we can work through your applications, see what options you have. But there you go. If you have any other questions feel welcome to give me a call. Leah Cox with the Mortgage Center. Hopefully I will be talking to you soon.

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