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All About Your Credit

How Credit Influences Financing

Credit is an agreement to borrow money with the promise that you will pay it back at a later time through scheduled payments. These payments usually include interest, which is additional money charged for the privilege and convenience of borrowing.

Maintaining good credit is key to financing a home purchase. In fact, your credit is one of the first things lenders examine when considering you for a loan.

What can you do to improve your credit – and your chances of getting a mortgage? Making payments on time is an important way to establish good credit. A pattern or history of frequent late payments can lead to a poor credit score, which can result in a loan offer at a higher interest rate or negatively affect your ability to be approved for loans.

Your Credit Report

When considering you for a loan, mortgage lenders will review your credit report and use the information found there to decide:

  • Whether or not to approve you for a loan
  • The type of loan for which you qualify
  • The interest rate to charge you

Your credit report displays your credit history and the credit score derived from this history. Your credit score, shown as a number, provides lenders with a fast and objective way to predict how likely you are to repay a loan.

The Importance of Good Credit

Because your credit history follows you throughout your life, making good credit decisions along the way will help a great deal when you're ready to start the homebuying process.

PHH Mortgage can help you gain a better understanding of credit and show you how to maintain a good credit rating. Read answers to some frequently asked questions about credit, or read our full Credit Guide. You can also contact one of our experienced mortgage representatives at (800) 210-8849 to discuss your personal situation. 

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