Scott Asks… I have a great job that provides me with a steady income and I have a large amount of cash in savings, this should make my past bad credit less relevant, right?



When it comes to purchasing, re-financing or even renting a home, having a great deal of money in savings or equity in your home does not necessarily mean you are in the clear to getting approved for a home loan.
Regardless of the amount of income you earn, if you want a home loan, you must meet the guidelines for the loan qualification. You must have good to excellent re-established credit, a variety of accounts on your credit report and low to moderate balances in comparison to your credit limits.

Credit scores are an indicator of risk and is used by the lender to determine the likelihood of default.  Your credit score will determine if you qualify for a home loan and what interest rates you’ll be offered by the lender. Your income does not pay a role in your credit score calculation.

If you do have a steady cash flow, you should have no problem paying your bills on time and building a quality credit score. If you have credit from your past that needs to be corrected – please use some of your cash to settle and payoff any outstanding bad debts.

If you need to re-establish your credit due to a limited good history – then start small. Apply for a gas card and or a department store card. A secured credit card is the way to go as well – as you will never be late since you pre-pay the amount that can be used on the card. If your bank offers a line of credit attached to your checking account – utilize this as well. Make sure you are using the credit and making monthly payments for a least a year in order to re-establish your credit score and have a positive credit rating.

Meet Cheryl!

About Cheryl

As a successful business owner and community leader, Cheryl Braunschweiger is known and respected for getting things done with a degree of skill and enthusiasm that bring out the best in those around her - colleagues, clients and friends. The name of her business, ALMC Mortgage, reflects Cheryl's philosophy and personality. She says it stands for All Loans Must Close –a reflection of her determination to do whatever it takes to serve her clients. Cheryl has been in the mortgage lending business for 20 years. Read More About Cheryl
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