Subscribe and receive email notifications of new blog posts.
RSS Feed
- 2026 | 17 Posts
- 2025 | 49 Posts
- 2024 | 53 Posts
- 2023 | 48 Posts
- 2022 | 48 Posts
- 2021 | 49 Posts
- 2020 | 48 Posts
- 2019 | 48 Posts
- 2018 | 54 Posts
- 2017 | 51 Posts
- 2016 | 14 Posts
- 2015 | 11 Posts
- 2014 | 21 Posts
- 2013 | 3 Posts
28
Give Your Credit Score A Boost With These Steps
Whether you're buying your first home or just moving to a new location, it's important to get your finances and your credit score in order before you apply for a loan. Lenders will look closely at your income, debt, and credit score to make sure you can afford the mortgage on your new home. If your credit is less than perfect, consider these tips from our real estate agents that can help you raise your credit score in a short amount of time.
Check Your Credit Score
If you're considering a move and you're looking for South Bend homes for sale, it's time to review your finances and check your credit score. Good credit and higher credit scores open doors and give you more access to lower mortgage rates from lenders. You also get a pre-approval letter from your lender, which verifies that you're qualified for a certain loan amount based on your income, debt, and credit score. Under federal law, you can get a free credit report each year online by visiting AnnualCreditReport.com.
How Lenders Look at Credit Scores
Credit scores are simply math formulas based on a person's history of borrowing patterns and repaying debts. The mortgage credit score algorithm produces numbers from 300-850, where 300 represents the highest risk of non-payment, and 850 represents the lowest risk of non-payment. Mortgage lenders look at credit score by numbers:
- Excellent credit is 740 or higher
- Good credit is between 680 and 739
- Average credit is between 580 and 679
- Below-average credit is between 500 and 579
- Poor credit is below 500
Factors That Make Up Your Credit Score
The main factors that go into your credit score are grouped into five categories and each category represents a certain percentage of your total score:
- Your payment history – 35%
- Your borrowing habits (amount owed) – 30%
- Your track record (credit history length) – 15%
- Your recent attempts to secure more credit (new credit) – 10%
- Your different types of credit (consumer credit mix) – 10%
What Credit Score You Need to Buy a House
Credit scores have a big impact on home loans and how much house you can buy. It's important to know how lenders look at credit scores and what credit score is good enough to buy a house. For most types of mortgage loans, 500 is the minimum credit score you can have to purchase a house. Here are the minimum credit scores required for the four types of government-backed loans:
- FHA Mortgage – 500 credit score
- VA Mortgage – 580 credit score
- USDA Mortgage – 580 FICO
- Conventional Mortgage – 620 credit score
Ways to Improve Your Credit Score
If you're planning to buy a house and your credit score needs improvement, you can boost your score within 6 months by following these important steps:
- Fix any errors on your credit report
- Get current on all of your past-due bills
- Pay your new bills on time (pay your minimum credit card payments, auto loans, and student loans first, then pay your entire credit card balance and other bills)
- Pay off your smaller debts
- Raise your credit limit and reduce your credit balance
- Avoid opening new credit cards and loan accounts
- Keep your existing credit accounts open
Building good credit with a high credit score takes time, effort, and focus. To buy a home, you don't need to have excellent credit, just qualifying credit.
If you're considering a move to South Bend, contact us to see our available properties. We can help you find the perfect fit for your family's lifestyle.
Note: a subscription to the Do Not Call list does not apply when requesting information from our company.
