How Do Lenders Evaluate Credit?

No matter when you’re ready to buy a home, your credit score will be a major factor in the lender’s decision to approve you for a mortgage.The mortgage process can seem pretty daunting, but the better it is understood, the smoother your home buying experience will be. Some of the things lenders typically look at when evaluating your credit report are:

Current credit situation

• How many revolving accounts, such as credit cards, do you have?
• What are the balances on those revolving accounts?
• Do you have installment loans – such as student, auto, or home loans?
• What are the balances on those installment loans?

The last 24 months...

• Does your report show payments made 60 days late or longer from their due dates?
• Do you have more than one payment that was 30 days late?
• Have you been late on a mortgage or rent payment?

There are many different factors lenders take into consideration when evaluating your score. The items mentioned above are only some of the things that can make or break your credit score. Keep in mind, there is no magic number that will get you approved for a mortgage. Every individual has his or her own unique financial profile that must be assessed before a decision can be made. The great news is that here at Lennar Mortgage, we believe that everyone deserves a chance to own a home and we want to be your partner along the way.