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New Mexico Homes Open for Buyers, but They Need to Check Credit Score First

By Sally Maison
Published: Thursday, January 21st, 2010

Las Cruces is one of the most popular places to buy a house in New Mexico. People who look for homes in the city have stable income and enough money in the bank for their down payment. But industry specialists note that some of them do not check their credit rating before looking for a house, which drags their mortgage application.

New Mexico Homes Open for Buyers, but They Need to Check Credit Score First Some homebuyers, who have cash in hand and a good income alongside, are now left wondering whether they would qualify for mortgage if they have shaky credit scores. Experts say the answer to the question is no longer as simple as it used to be.

Housing coordinator Dolores Rosell said it depends on the type of loan a person applies for and the lender who is approving it. She added a credit score of 458 used to be enough to get a loan, but that was before the mortgage crisis hit the United States. Today, one must have a credit score of about 600 to qualify for mortgage, she remarked.

Experts say there is a need for homebuyers to check their FICO score before applying for a loan. FICO is the most popular credit rating system designed by Fair Isaac and Company. According to the Wall Street Journal, 90 percent of all lenders in the country are using the FICO system, which grades consumers through a scale that runs from 300 to 850.

Mortgage provider Louis Sauceda noted that the industry has increased lending standards, making credit scores quite important. Consequently, it has become an imperative for homebuyers and consumers in general to improve their credit ratings.

Rosell said it takes years to build a credit score but it only takes 30 days to ruin it. She added that consumers cannot expect to see their credit ratings surge from 500 to 700 in just six months.

Experts suggest avoiding late payments to avoid serious injuries on a score. Finance planner Charles Wagner emphasizes the importance of not missing any kind of payment. He advises consumers to always pay bills on time.

Specialists also say low scores are not always caused by poor financial management. A consumer may have a poor rating simply because she does not have a credit history yet. This is especially true for students, fresh graduates, and new residents of the country.

Rosell recommends opening a secured card as an excellent way to start a credit history. She added that consumers can get a card by depositing $250. For her that is the best way to build credit instead of opening 20 different cards.

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