We all know your credit score can directly affect your ability to buy a home – your credit score and home buying go hand in hand. Good credit equals lower interest rates while having bad credit can inhibit you from being able to buy at all. While credit scores can range from 300 to 850, 600 is generally the lowest you will see approved for an FHA loan. Loan officers and banks can get creative in trying to find the right loan for you based on your credit score, loan terms, and down payment options. If you have a lower than ideal credit score, don’t give up quite yet…
Quick Tips for Improving Your Credit Score
- Ensure you don’t charge too much to your plastic. Your credit score should improve if you’re only using a small amount of available credit.
- Don’t open extra credit cards! Stick with one or two that you rely on. This looks better for your credit score and allows you to track expenditures and payments more efficiently. (But, don’t cancel a bunch of credit cards at once either – this won’t look good.)
- Pay off your balance monthly. This one’s so much easier said than done, but it makes one heck of a difference!
- According to credit.com, as many as 1 in 5 Americans have errors in their credit reports. Check your report to ensure its accuracy.
- Set reminders in your calendar to ensure you make payments on time.
If you’re struggling with your credit, take a bit of time to improve those areas of struggle before jumping into buying a home. The strong tie between credit score and home buying can’t be denied! Avoid inflated interest rates or downright loan denial by sticking to the tricks of the trade listed above. Many aspiring home owners have turned their credit around and you can too.
Read the full article here: What Credit Score Do I Need to Buy a Home