5 Credit Score Myths to Know before Applying for a VA Loan in Houston

Insured by the U.S. Department of Veterans Affairs, VA is a specially designed home loan program for veterans, military officers, and their surviving spouses to allow them to buy a home. But the loan is offered by the private lenders, so a borrower has to fulfill the requirements of a lender to get the loan approval.

One of the most crucial things that the lender checks before proceeding with the loan program are your credit score. Though there is no fixed credit score for VA loan in Houston, the higher the score the better it would be for you. So, you can take steps to improve the score, and never rely on ant credit score myths. To help you, here we have uncovered a few credit score myths – 

Myth 1: Carrying a small balance on your credit card is best 

No, the reality is not so. There are two things that you need to ensure regarding the credit score. The first one is that you pay your bills on time. And the second one is that you don’t constantly max out the credit you have. And yes, one of the things you like to see is that you pay your credit card bill – all of it. The only thing a running balance increase is an interest you owe. So, steer clear of this thing. 

Myth 2: You can pay credit cards late if you pay them off in full

Well, the reality is missing a payment is one of the crucial things that can affect your credit score. Even if you pay the loan a day late, your credit score can be affected as much as 100 points. To lower such possibility, always pay your installment loans on time and in full. If you need to pay late for a genuine reason, call your lender and discuss your problem with him or her. They can help you with this. 

Myth 3: Closing old cards can erase negative history 

Well, if that were the reality everyone would do so to remove the negative history. Credit reporting companies keep information on your file for several years. And the longer you have responsibly used a particular credit card, the better effect it has on your credit score. Keep this in mind that you are judged by how much of your credit you are using. Closing a card can affect that percentage. 

Myth 4: Without having credit means a perfect credit score 

There is no reason to maintain the reputation of not having any credit. If you have never used credit, anyone can easily guess how well you will handle it for the first time. Credit reporting agencies term is as a “thin file”. It means there is not enough information on you to create a credit score. So, if you are a newbie, get a loan, and work on to fattening up that file.

Myth 5: Checking your credit score can hurt your score 

How else would you come to know about your score? It is true that several “hard” checks by companies can affect your score. Hard checks happen when you are looking for a loan, such as a home loan. But when you check your own, it is called a “soft” check and it does not hurt your score. So, you can check your score, at least once in a year to know what the score is and whether you need to improve it or not. 

Now, you can understand what you have heard about credit score myths are not true. So, what to wait for? Check your credit score, save a decent amount for your down amount, and apply for a VA loan to lender. 

Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.

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