How Your Credit Score Affects Home Loans For The Dallas Housing Market

How Your Credit Score Affects Home Loans For The Dallas Housing Market

Reading Time: 4 minutes

By now, everyone should know that your credit score plays a crucial role in deciding whether or not you get a home loan and how favorable the terms are to you. Dallas continues to grow, and the job market is booming.

 

In this article, we look at the current state of the housing market in Dallas, what it may look like in 2020, and how your credit score affects your chances of getting a home loan on good terms.

 

 

Current State Of The Dallas Housing Market

Home values took a slight dip back in April, which many experts attribute to value decreases in the West Coast markets. The net effect of that is that housing prices decreased in the Dallas-Fort Worth area as well. While the drop in prices is relatively small, (0.1%), it points to changes coming to the housing sector.

 

According to Zillow, housing prices in the Dallas-Fort Worth area dropped slightly back in April, which is the first decline reported since January of 2012.

 

Also, the information provided by Dallas-Fort Worth real estate agents suggests a month-to-month decline in median home prices.

 

 

According to Dallas News

So far in 2019, the median sales price of single-family homes sold by agents in North Texas is up 2% from the first four months of 2018. Zillow said that in April, the “typical U.S. home is worth $226,800.” That’s less than the $243,900 value in the DFW area.

 

While the housing market is slowing, with the average number of days on the market at about 53 in the North Texas region, experts caution people to not panic just yet because overall, home prices are increasing.

While Zillow says the Dallas market is “cool” they also call for a 7.5% rise in the median home price in 2019, which puts the market on an upward swing.

 

DM Magazine says: 

The reason for that is simple. There are jobs here, and tens of thousands of people are still moving to this area looking to land those jobs. The Bureau of Labor Statistics says 102,500 new jobs were created in 2018. There are now 3.7 million people in this area going to work every day.

 

The jobs are here in Dallas, and Texas continues to lead the country in job creation, so the housing market, for the time being, is healthy. If this competitive market worries you’re you about not being able to afford a home, you still have the option of getting something cheaper as you move away from the downtown area.

Affordability isn’t just a problem here in the Dallas area, but throughout the major markets around the country too. Generally speaking, the further away you move from the major metro areas, the better the deals you can find.

 

Predictions For 2020

While the above data paints a conflicting picture, what can be predicted for the housing market in the Dallas Fort-Worth area next year is that the low inventory and high demand will keep the market very competitive for the next few years. 

 

The strong economy here is giving the real estate market a healthy boost, which should keep prices from dipping too much in 2020. Lastly, according to the experts at Zillow, they predict a gain of 4.8% in the market through the summer of 2020.

 

As you can see, there’s no reason to panic right now, as the market looks strong throughout the better part of next year.

 

credit score in dallas

 

Credit Scores & Your Home Loan

If you’re not familiar with how credit scores work, here’s a brief rundown. Credit reporting agencies determine your credit score based on a few factors, including:

  • Your credit to debt ratio
  • They type of credit you have
  • Timeliness of payments
  • If you’ve filed for bankruptcy

Credit reporting agencies look at this information and derive a number that gives lenders an idea of your creditworthiness. 

 

The typical FICO score breaks down like this: 30% is based on how much you owe; 35% is based on your payment history; 15% is based on the length of your credit history; 10% is based on new credit you’ve acquired, and 10% is based on the types of credit you have.

 

Your credit score not only tells the lender whether you’re worthy of credit or not but also the interest rate you pay. A high credit score usually means a low-interest rate, while a low score means a high-interest rate.

 

Lenders differ on what they consider the baseline for good credit, but in general, a score of 700 or above is deemed to be excellent and will net you the most favorable terms. Once you dip down into the 600s, lenders see you as a high risk. For some lenders, a score of 660 or below is a ‘no’ for a loan, so this is why it’s imperative you maintain a good credit rating.

 

 

How To Fix A Bad Score

So let’s say you want to buy a home, but your credit score won’t allow you to get a loan or will get you one on terrible terms. What can you do to fix it?

 

The first step is to:

Get a copy of your credit report to make sure there aren’t any errors that are dragging your score down. 

 

Next, the most important thing you can do to get your score moving in the right direction is to pay every bill on time. Making timely payments is the quickest way to improve your score. Remember to pay down debts quickly, which often means making more than the minimum payment each time.

 

As you can see, your credit score is essential to getting a home loan on good terms. And, if your score isn’t where it should be, you’re better off holding off on getting a loan until you can improve it. If you need help, contact a credit repair Dallas company to get you back on track and into the home of your dreams.

 

What Do Landlords Look For in a Credit Score?

What Do Landlords Look For in a Credit Score?

Reading Time: 4 minutes

Whether you’re applying for a loan or an apartment, at some point, the state of your credit will likely matter. Before entering into a monetary arrangement with a customer, a lot of businesses and business owners will check your credit.

 

As important as your credit is, a lot of people know very little about credit and how it works. That’s why we’re going to break down a few of the most common questions regarding credit, credit scores, and why they’re checked.

What is a Credit Score?

Your credit score is an average score based on your credit history. This credit score is affected by several factors, the biggest of which is your payment history. Your payment history is basically a record of your payments that takes into account whether or not they were made on time.

What is a Credit Check?

Simply put, a credit check is a report to understand your financial behavior. It can show if you paid back your credit on time, how much credit you currently have and how well you are managing it.

 

A company doesn’t need your consent to do this, but they must have a legitimate reason for looking it up.

Who Can Check My Credit?

Anyone from banks, credit providers to landlords, and even employers can run a credit check. However, to do so they’ll need the right information. To check someone’s credit you’ll need their social security number, address, and employment information.

 

This is why landlords will often ask for this type of information on the rental application.

Why Do Landlords Run Credit Checks?

When it comes to renting to a potential tenant, landlords want to make sure the applicant is dependable. Late payments and broken leases can be a real inconvenience for landlords, so they typically avoid situations like as much as they can by choosing less “risky” tenants.

 

To avoid entering into a contract with someone that regularly submits late payments, Landlords will often run a credit check. While your credit is mostly determined by your payment habits, several other factors can affect your credit score.

What’s Included in a Credit Check?

A lot more than your credit history goes into a credit check. In addition to credit-related payments, a credit check will provide your potential landlord with a history of your finances, criminal convictions, and lawsuits.

 

Additionally:

 

A credit check will provide your potential landlord with information regarding your financial stability. They can check your employment status as well as your income during the screening process.

 

A credit check will also provide landlords with information regarding their applicant’s debt. However, debt doesn’t usually play as big a part in the landlord’s final decision. Typically, they’re more interested in your income and your credit.

What Do Landlords Look For in a Credit Check?

Different landlords have different standards when it comes to who they’ll sign a lease with. In some cases, landlords won’t even run credit checks, although most choose to do so.

 

Landlords have the right to refuse an application due to criminal convictions. However, according to the law, they aren’t supposed to let an arrest affect their decision unless that arrest was followed by a conviction.

 

When it comes to a credit check, the two biggest factors for a landlord are your income and your credit history. Landlords typically want to make sure you make enough money to pay them.

 

Furthermore, they want to make sure you have a habit of paying your bills on time.

 

Landlords and Credit Score

 

What Are Some Dealbreakers for Landlords?

Again, different landlords have different standards when it comes to what they would consider a dealbreaker.

 

Most landlords want to rent to tenants that have a credit score of 620 or higher. A credit score lower than 620 might be a dealbreaker for some landlords. Similarly, past evictions are another red flag that landlords will often take into consideration.

 

A credit check doesn’t provide your landlord with information regarding past evictions. However, they can find out about evictions through other means. While a single eviction might not be a dealbreaker for a landlord, it’s still a red flag that will likely affect their decision.

 

Another potential dealbreaker for landlords is the applicant’s income. Your potential landlord wants to make sure that your income is substantial enough to cover the cost of your rent.

How Do I Check My Credit Score?

Checking your credit is particularly easy. All you’ll need is your social security number, address, and employment information. However, you should be very careful when it comes to giving your social security number.

 

Be sure to only check your credit score with trusted platforms.

 

One of the most commonly used and trusted credit check sites is Experian. To check your credit, just click the link! It’ll redirect you to Experian’s online credit check.

A Good Credit Score is the Key to Financial Freedom

At the end of the day, having good credit mostly comes down to paying your bills and rent on time. There are a few other ways to increase your credit score. However, as long as you live within your means and spend responsibly, your credit score will usually be okay.

 

If you’re worried about what a potential landlord might find on your credit report, look first. You’re entitled to a free annual credit report. Plus, there are several ways to check your credit for free online.

 

You can’t control how a landlord or property manager might interpret your credit report, but if you know what’s on it, you’ll be more prepared to answer any questions they might have.

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