If you are interested in purchasing a home but haven’t used credit in 6 months or more, you may not have a FICO score. This may be an issue for those in the military who have been overseas for some time and plan on relocating. Lenders look at your credit score during the prequalification process. Until recently, lenders accepted four non traditional tradelines (i.e. cell phone bills, rental history, utility bills, etc…) if a buyer did not have a credit score. After speaking with a lender, I found out due to recent changes, non traditional tradelines will no longer be considered without a credit score. Check with your lender for further information if you lack a FICO score and are planning to buy a home in Colorado Springs.
If you are planning on buying a home in Colorado Springs:
– There is a 45-day window to shop for mortgages without any negative consequences to your credit.
– You can obtain financing through FHA or VA with a credit score of 580 or higher and will need a 620 or higher for Conventional financing.
– You can purchase a home through FHA financing within 2 years of a bankruptcy but have to wait 5 years if you obtain a Conventional loan.
– Closing accounts can actually hurt your credit opposed to leaving them open and at a zero balance.
– Making large purchases or having several inquiries on your credit while in the process of buying a home can actually hurt your credit and result in not qualifying for a loan.
– A credit score of 720 or higher is considered a good credit score