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Road map to best rates.

February 7th, 2018 12:45 PM by Salim (Sam) Kader MLO# 130505

Winter is the best time for potential home buyers to work on their credit to obtain the best terms and rate on a mortgage (though for optimum results, improving your credit should be throughout the year process).  

Winter is a good time because home buying season starts to heat in the springtime. So winter is an excellent time to do some “touch-up”  and perform necessary corrective actions to make the process as smoothly as possible. Please contact me directly to ascertain where you stand today with all three credit bureaus – TransUnion, Experian and Equifax.  Here's a sample of what your credit report looks like.  

Credit utilization is one thing that you can work on immediately.  Most people tend to rake up their credit cards over the holidays. We recommend that the optimal utilization should be around 30%. For example, if you have a credit card with $1,000 credit line, pay it down to at least $300 balance and keep it at that level until you have received the key to your new house since lenders will re-run credit after 60 days. 

Pay your bills on time.  This one item will have the biggest impact on your score.  Once reported, late payments will be shown as derogatory item such as late payment, collection, and be grouped with other derogatory items such as bankruptcy and tax lien.  

I found an error on my credit reportHow long will it take to correct and improve my score?  It depends. For example, paying down your credit card will take one billing cycle to see its results. However, if you have a derogatory item such as late payment, collection, bankruptcy, judgement, or tax lien, that can stay on your credit report for 7 years. You can still be Pre-Approved but you will not obtain the best terms and conditions. 

What are lenders looking for? We prefer if you have 3 scores from each credit bureau (Equifax, TransUnion, and Experian) with 3 revolving trade lines such as regular credit cards or departmental credit cards for at least 12 months with on-time payment history and with 30% credit utilization rate (see above). However, I can also help you in using other non-traditional accounts such as your cell phone bill, utility bill or rental payment history as non-traditional credit profile. 

How much can I qualify for? Having a good credit (700 and above) is only a portion of what we will evaluate in determining your loan amount. Other factors are your ability to pay (Debt-To-Income – DTI ratio), down payment, and subject property(appraisal).  

Freezing your account? If you were impacted by recent Equifax data breach, make sure that all three credit bureaus are unfrozen. It may take up to 48 hours for all three bureaus to remove the freeze.  

Additional tips to boost your score but for professional help, please contact me directly for a starting point. 


Posted by Salim (Sam) Kader MLO# 130505 on February 7th, 2018 12:45 PM



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Pacific Coast Financial LLC

Lic# MB 78982

2150 N. 107th Street Suite 170
Seattle, WA 98133