 TITLE: What Is a Second Mortgage? CONTENT: Is a Good Credit Score Needed for a Second Mortgage?\n----------------------------------------------------\nAs with a conventional mortgage, your credit score plays a role in determining the interest rate and payment terms you'll get on a second mortgage.\nRequirements differ around the country, but lenders tend to look for a minimum FICO® Score☉ of about 620 from second mortgage applicants. All other factors being equal, the higher your credit score, the lower your interest rate is likely to be.\nLenders also consider your debt-to-income ratio (DTI)—the portion of your gross monthly income that goes toward debt payments. Most lenders prefer applicants with a DTI below 43%, though exceptions are possible (especially if you show that the loan will reduce your monthly DTI).\nIf you're thinking about getting a second mortgage for non-emergency purposes, it may be worth spending six to 12 months working on improving your credit score before you start shopping for a loan. These steps can help you get started, and can bring relatively quick improvements to your credit scores:\n*   Check your credit reports and credit scores so you know where you stand, and make sure the information in your credit reports is accurate. If you find any inaccuracies, you can dispute them with the credit reporting agencies (Experian, TransUnion and Equifax). Your credit report will show you where your credit may need improvement, such as late payments or a short credit history.\n*   Pay down debt. Paying off high credit card balances lowers your DTI and can also help improve your credit score. Your credit utilization rate—how much credit card debt you have in relation to your total available credit—is an important factor in your credit score. Get your credit utilization rate as low as possible (think single digits) to see the biggest improvement in your scores. Ideally, don't carry any debt from one month to the next.\n*   Don't apply for new credit. When you apply for a loan or credit card, the lender typically makes a hard inquiry on your credit report, which can cause your credit score to drop by a few points temporarily. Adding new debt can also increase your DTI. END