How much mortgage your lender approves depends on your credit score. Although many other factors do come into play while deciding on the amount of mortgage you will be approved for, nothing is as important as your credit score.

What is a credit score?
Credit score is a score or point calculated keeping in view your credit history. This takes into account the amount of credit you have obtained. The credit score offers valuable information about your composite credit history, employment status, saving propensity, and so on.

Various organizations do offer credit score to lenders, however the most renowned and respected credit score is the FICO score. The FICO is a very effective model developed by the Fair-Isaacs Company. The best thing about FICO scores is that these change daily, depending on the information received at the repositories.

Why is the credit score important?
Employment and saving propensity are no longer effective enough to account for the risk involved in lending money, especially when the amount is as huge. On the other hand, the competition among lenders and this forces them to take more risk. Credit score utilizes a risk-based pricing model, which helps lenders calculate the amount of risk involved.

Higher your credit score, easier the loan approval process

• Pay your credit card bills in time.
• Do not apply for new credit unnecessarily
• Every time you sign and return a new credit card offering an inquiry is generated
• Try to maintain your credit card balances between 40% - 50% of the maximum credit limit.
• Avoid consolidating all your credit cards
• Avoid running into petty disputes

There are also proactive things you can do to improve your credit scores. Consult an expert about other ways of improving your credit score well in advance. You can also let us know of your requirement, and we will advise you about experts who can significantly help you towards improving your credit score.