Buyers Agent Melbourne

Using a Buyers Agents: How Can Your Credit Score Affect Your Chances Of Getting A Mortgage

You may know that when it comes to getting a mortgage, your credit score is very important. If it isn't good you could find yourself stuck with a higher interest rate, or even have your offer rejected. Why is your credit score so important? And how can it affect your chances of getting a mortgage?

With this knowledge, you could boost your chances of being accepted and get a better interest rate on your mortgage, so what are you waiting for?

Why is your credit score important?

It's something that can show a lender your financial history and how likely you are to pay them their money back. With a good credit score you’re likely to be fine, but if you have a low credit score it often means that you aren't very responsible with your money.

The less a lender thinks they can trust you with their money, the less chance you have of getting a lower interest rate or even a mortgage.

Why would I get a higher rate with a bad credit score?

You may wonder why you will be charged more if your credit score shows that your history of paying money back isn't great. Well, there is actually a very good reason for this.

Lenders give people a higher rate on their mortgage when they have a low credit score because they are more likely to get a decent amount of their money back if you default on your repayments. For example, if you have double the interest, they will have their money for the loan back twice as fast.

Of course, they want all of their money back and the interest on top, but it's safer for them to do this just in case the borrower doesn't pay them back the full amount. So, the less they trust you, the higher the mortgage rate will be.

Improve your credit score

Check your credit score before you talk to a lender and see if it's good or bad. If your credit score isn't good, there are ways to try to make it better – and this can drastically increase your chances of getting a mortgage with a low interest rate.

It can take time to make your credit score perfect, especially if it's very low, but it can be worth the time and effort. It can literally make or break your chances of approval.

Cohen Handler Buyers Agent Melbourne

Address: 1501/52 Park St, South Melbourne VIC 3205

Phone: 1300 420 160