Mortgage lenders generally consider 4 "pillars" of an application:

(1) PROPERTY =  security for the loan

(2) CAPACITY = can the borrower(s) afford the payments

(3) EQUITY = a.k.a down payment = how much of their own money are the borrowers putting into the home

(4) CREDIT = tendency/history of borrowers to meet their finanical obligations.

Personal credit history is, in the majority of mortgage applications, the MOST important component.

CREDIT scoring is made of several components.   These include:

PAST PAYMENT PERFORMANCE - late payments, especially recent ones weigh very heavily agaisnt a persons credit score

UTILIZATION - "maxing out" limits drag one's credit score down.   Ideally balances should be below 30% of the limit

HISTORY - how long credit has been in use.   Longer history is better

TYPES OF CREDIT - the quality of creditors (e.g. finance companies vs. bank loan)

INQUIRIES - general make up about 10% of the credit score.  There is a lot of misunderstanding and misinformation about this aspect of credit scoring.   

If you have questions about your credit, please contact us.  We'll be glad to help.