Recent applications for numerous cards, even if unused, also may hurt credit scores. However, borrowers who show a pattern of managing credit wisely, such as keeping credit balances low and paying bills on time consistently, get positive marks. Other factors in determining a mortgage application include employment history, monthly debt payments versus current income, savings patterns and amount of savings, the type of loan, the value of the property and the amount of the down payment planned or equity in the home. Until recently, all of this information was evaluated manually by reviewing each piece of information separately, and was very time consuming. Today, many lenders use a computer-based process to automate loan underwriting that evaluates the information easily, objectively and often within minutes.
Credit scores are blind to demographic or cultural differences among loan applicants.
While it's not a good idea to have a lot of credit cards, it is important to use credit because it establishes a willingness to pay bills and establish a credit history. According to Robinson, the most important thing potential home buyers can do is pay their bills on time. At the very least, the minimum amount should be paid by the date it is due. Potential buyers are urged to check their credit records and make sure they are accurate. Credit records can vary from one company to another, so home buyers may wish to contact all three to resolve any potential problems in advance.