Applying for a VA Loan in Houston: 5 Credit Score Myths to Know
VA is a specially designed, government-backed home loan program for veterans, military officers and surviving spouses. As it is backed by the VA, the lenders approve this home loan program with a low credit score and down payment. So, if you don’t have a good credit score and you could not come with a decent down payment, then this home loan would be a great choice for you.
But there is no fixed credit score for VA loan in Houston. It varies from lenders to lenders. You can ask for quotes from several lenders, compare them and then who to opt for. Till then, know these credit score myths –
- A bad credit score lasts forever
It is not true. A bad credit score will last forever if you continue to make choices, which will hurt your credit score, such as paying late, maxing out your credit cards, letting bills go to collections, etc. Otherwise, if you take steps to improve your credit score, you will see a positive change gradually.
- Checking the credit hurts the score
Well, you need to know the fact. A notation called an “inquiry” is generated on your credit report every time someone looks at your file. And according to the myth, it hurts your score. Well, it is both yes and no. An inquiry affects your score only if it is related to a credit application, which you have submitted. When you apply for a loan or a credit card, your score might fall, as that application suggests you will be adding debt. But if you just look at your credit report the inquiry will not affect your score.
- There is only one credit score
It is completely wrong. There is not just one single credit scoring formula, which applies to all consumers in all situations. There are diverse scoring models in use in the credit marketplace. So, a consumer could have different credit scores. But most of the borrowers of the U.S. check their scores from three major credit bureaus. With this, you have a fair idea about your credit score and you can move accordingly.
- You will have to make a lot of money to have a good credit score
Your income and bank account balances can’t influence your credit score directly. How much money you have affects your credit score only indirectly. Keep in mind that income is not a crucial factor in your credit score. But bill payments habits impact your credit score. Irrespective of how much money you have, paying your bills on time is the best thing you can do for your credit score.
- Debit and prepaid cards help build a good credit score
Bad news for anyone who applied for a prepaid or debit card hoping to improve their credit score. There is no credit aspect to debit or prepaid cards and your history with these cards is not factored into your credit score. Credit cards and loans are the primary financial products, which impact credit scores.
As the myths are debunked, now, start looking for a VA lender and apply for the loan today.