It goes without saying the better your credit score, the lower the mortgage interest rates and with that your monthly payments. Some lenders may consider giving you a loan with a credit score of around 580. This is considered a mid range FICO score. BUT debt to credit and debt to income ratios are also reviewed when making the decision to give you a mortgage. The less debt you owe, the better the ratios reviewed and the better the interest rates being offered. Many times the lender will tell you that you should pay off your debts. Makes sense, but what about the third party debt collectors? Why should you pay them? They don’t have a right to your debt. You never signed a contract with them. Lenders tell you this because they want you to sign the mortgage application and lenders are specialized in lending money, they are not specialized in credit repair, they don’t know the laws governing credit repair. That’s where it is important that you either educate yourself on the laws or you work with someone like us who guides you the right way AND in addition continues your credit repair with successful lawyers asking the credit repair agencies to pay you for their violations in your case. How satisfying is this!?
If you have tax liens and judgments against you, you definitely should remove those public record entries from your credit report before you apply for a mortgage loan. Liens and judgments are public records but they also need to be verified and validated before they can make their appearance on one of the credit reports being pulled by your lender.