The better your credit score, the lower the interest rate you can qualify for. Fortunately, your bank can help.
From his vantage point as a veteran stone mason, John Thompson has had a lot of time to consider the significance of a personal residence. John’s clients have relied on him to help restore historic chimneys, fashion outdoor kitchens and enliven outdoor living spaces with intricate designs in tile, stone and brick. Not long ago, John and his wife, Geneva, began the journey to building their own dream home, and they turned to Bank of St. Francisville for help.
“The Thompsons were not just a number to us,” says Vice President of Commercial Lending Melvin Harvey, Jr. “They were a family who had worked hard and wanted a house they could live in for the rest of their lives. We met several times and developed a specific plan that would get them the house they wanted with monthly payments that fit their budget.”
As it does for every borrower, the process began with an examination of the Thompsons’ credit scores. Vice President of Mortgage Lending Kellye Cornette worked with John and Geneva to identify areas that could be improved in order to get the couple the most favorable loan package possible. This included closing some revolving lines of credit that were no longer in use and paying down existing debt.
“Understanding your credit score is the first step in securing a loan, so it’s really important to keep tabs on it and find ways to make it as strong as possible,” says Kellye. “We’re happy to advise our customers about how to improve their scores. The better your credit score, the lower your interest rate.”
The Thompsons worked over several months to improve their credit scores. Meanwhile, they were able to secure a BSF construction loan, which allowed them to get started on the project. They hired local architecture and construction firms to design and build their new house, and John, of course, completed all the masonry work. Today, the home is finished and the Thompsons are thrilled.
John and Geneva’s credit scores have continued to improve, which will now help them secure a conventional mortgage with a favorable interest rate. This was part of a long-term strategy the bank helped design.
“That’s what a local bank can do,” says Melvin. “We know you and your family, and the line of work you’re in. We can work with you face-to-face to put you in the financing package that best suits you.”
John, who also serves as a preacher at Greater Hollywood Baptist Church and a member of the West Feliciana Parish Council, says the experience surpassed his expectations.
“It was just a great process,” he says. “I recommend everybody in the parish interested in a home or building your business to check with Bank of St. Francisville. They’re just some great people.”
Buying a house? Here are some tips for improving your credit score.
When Bank of St. Francisville works with borrowers, the first step in the process is to take a look at your credit score. Anyone who has ever had a loan or credit card and has paid on it monthly has one. Scores are kept by three different credit reporting agencies, and when you buy a home, the median score is usually used.
“Don’t let the idea of a credit score intimidate you,” says Kellye Cornette, BSF Vice President of Mortgage Lending. “We’re here to help explain it and show you how to achieve the best score possible.”
- Credit scores can change on a daily basis. Be sure to check yours regularly through free online services like CreditKarma.com.
- Don’t be late on payments, especially mortgage payments and car notes. This has a big impact on your score.
- Set up autodraft payments to avoid being late on monthly bills.
- If you’re considering buying a home, avoid adding to your debt ratio by making large purchases beforehand, like a new car or boat. Make those after you are settled into your new mortgage payment.
- Keep one credit card rather than several.
- It’s better for your score to have borrowed money from a bank than a payday lender.
- Don’t max out your credit card and leave it maxed out. Demonstrate you can pay it down, or better yet, pay it off each month.
- Save as much money as you can for a down payment and closing costs.
- Don’t get discouraged if you’ve made credit mistakes in the past. It may take a year or two, but credit profiles can be significantly improved.