Credit scores are mathematical computations, probability figures.
And, in the mortgage world, they’re designed to do one thing: and that’s to gauge the likelihood that you as a homeowner will have the ability to keep making payments to your lender.
But because it’s a probability and a snapshot in time, credit scores are impermanent. Low credit scores can be improved, and high credit scores can drop.
You are in control, with your credit score comprised of five scoring categories. Whether you’ve been making credit card payments and other payments on time; how far you are from being maxed out on your credit cards and other lines of credit; the number of years that have passed since you first got access to credit; the types of credit you tend to use; and, your recent patterns attempting to access new credit.
These five building blocks then get put against a timeline that borrows from Newton’s First Law, which states that an object in motion tends to stay in motion.
How you’ve handled your credit in the recent past is likely the same as how you’ll handle it in the very near future. And, this is the most recent six months has such an outsized effect on your credit score. What you’ve just done is a terrific predictor of what you’re about to do next.
Which means you can always improve your score if you want to or need to.
So, if you’re thinking about your credit score and don’t know where you should start, reach out with your questions because we’re here to help.
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When your lender says, “you have to act quickly” is not some high-pressure sales tactic meant to make you feel fear. It’s the truth.