When it Comes to Buying a Home, Credit Matters
Posted On: April 8, 2022 in: Home Loans
by Ben Samson, Assistant Vice President - Mortgage Advisor
Nobody likes lending someone money and not getting paid back! So, when a lender at a bank needs to determine whether an applicant qualifies for a home loan (which is typically A LOT of money), one of the first things they do is check your credit score.
A credit score is a number that is intended to predict the likelihood of you paying back your loan. It’s determined by several things…payment history, debt, outstanding lines of credit, and more. A high score will get you the best possible rate and lower monthly payments, while a low credit score may not prevent you from getting a loan, but it may make it more expensive with a higher interest rate and payments.
What IS a good credit score?
- A score of 740 or higher is considered excellent credit.
- A score between 700-739 is considered good credit.
- Scores between 630-699 are fair credit.
- And scores of 629 and below are poor credit.
How do I check my credit score?
Visit FICO®, Experian®, Transunion® or Equifax® online, or go to: www.annualcreditreport.com.
How do I improve/maintain my credit score?
- Make payments, including rent, credit cards and car loans ON TIME.
- Keep your spending to no more than 30% of your limit on your credit cards.
- Pay down high-balance credit cards and consider balance transfers to free up credit.
- Check for any errors on your credit report and work toward fixing them.
- Don’t take out new loans or credit cards during the home-buying process.
For more information or help with determining how your credit score can impact your home-buying ability, contact our experienced mortgage lenders today!