Spring cleaning doesn’t have to be a bummer.
Find out how
Do you want content like this delivered to your inbox?
Share

What Homebuyers Need To Know About Credit Scores

Share

What Homebuyers Need To Know About Credit Scores

Andy Rose

Andy brings to the table over 10 years of real estate experience including becoming a licensed Georgia broker in 2018 and a licensed Broker in Fl...

Andy brings to the table over 10 years of real estate experience including becoming a licensed Georgia broker in 2018 and a licensed Broker in Fl...

Jun 22 4 minutes read

If you’re thinking about buying a home, you should know your credit score’s a critical piece of the puzzle when it comes to qualifying for a home loan. Lenders review your credit to assess your ability to make payments on time, to pay back debts, and more. It’s also a factor that helps determine your mortgage rate. An article from Bankrate explains:

 “Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: Typically, the higher your score, the lower the interest rates and better terms you’ll qualify for.”

This means your credit score may feel even more important to your homebuying plans right now since mortgage rates are a key factor in affordability, especially today. According to the Federal Reserve Bank of New York, the median credit score in the U.S. for those taking out a mortgage is 765. But, that doesn’t mean your credit score has to be perfect. An article from Business Insider explains generally how your FICO score range can make an impact:

“. . . you don't need a perfect credit score to buy a house. . . . Aiming to get your credit score in the ‘Good’ range (670 to 739) would be a great start towards qualifying for a mortgage. But if you're wanting to qualify for the lowest rates, try to get your score within the ‘Very Good’ range (740 to 799).” 

Working with a trusted lender’s the best way to get more information on how your credit score could factor into your home loan and the mortgage rate you’re able to get. As FICO says:

“While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single "cutoff score" used by all lenders and there are many additional factors that lenders may use to determine your actual interest rates.”

If you’re looking for ways to improve your score, Experian highlights some things you may want to focus on:

  • Your Payment History: Late payments can have a negative impact by dropping your score. Focus on making payments on time and paying any existing late charges quickly.
  • Your Debt Amount (relative to your credit limits): When it comes to your available credit amount, the less you’re using, the better. Focus on keeping this number as low as possible.
  • Credit Applications: If you’re looking to buy, don’t apply for other credit. When you apply for new credit, it could result in a hard inquiry on your credit that drops your score.

When you’re ready to start the homebuying process, a lender will be able to assess which range your score falls in and tell you more about the specifics for each loan type.

With affordability challenges today, prioritizing ways you can have a positive impact on your credit score could help you get a better mortgage rate. If you want to learn more, let’s connect.

Ready to Take the Next Step?

We want you to feel confident about your next steps as a homebuyer.

Click Here
He made the process of easy!! Would highly recommend him and Stephanie.

Andy did a great job!! Even after the buying and selling was done, he still followed up with us. He made the process of easy!! Would highly recommend him and Stephanie.

Cash in hand above asking within 10 days!

Our home was on the market for 8 months with multiple failures to close and numerous frivolous and expensive repairs being made before we were introduced to Andy. Within 10 days after we selected Andy as our realtor we had closed with cash in hand above our asking price. Select Andy as your realtor as soon as possible because his enthusiasm, prompt actions, professionalism and expertise will likely yield a transaction experience that is as pleasant and profitable as possible.

Will work hard for his clients!

Andy did a great job for us in the sale of our house. We had relocated out-of-state and needed to just 'unload' our house. Andy was able to find us a buyer and close the sale. He is a great agent who will work hard for his clients. If you need a realtor, I can't recommend Andy enough.

Get your home's accurate value.

Instead of a robot and an algorithm, we use our experience and up-to-date MLS data*

  • Step 1
  • Step 2
First Name
Last Name
Email
Phone
Best time to call

We'll be in touch soon!

Our goal is to send your report over within 24-48 hours. In the meantime, hear from our past sellers about their experiences.

We use cookies to enhance your browsing experience and deliver our services. By continuing to visit this site, you agree to our use of cookies. More info