When buying a home there are a few numbers that determine your buying power. As a lender we’ll look at a few things, including your credit history, income and how much debt you have.
Why is Your Score Important?
So, what exactly is a FICO® score and why is it important? Your FICO® score is a credit score based on the information contained in your credit report. In reality, you actually have three FICO® scores, one for each of the three credit bureaus – Experian, TransUnion and Equifax. Each score is based on information the credit bureau keeps on file about you.
Your score is one of the factors that will be used by lenders to determine the interest rate on your loan.
Minimum Credit Score
The minimum credit score you need to purchase a home will depend on the type of home loan you qualify for. It’s important to remember that each home loan is different. Your dedicated PrimeLending loan expert will be with you every step of the way to find the right loan for your situation.
Improving Your Score
If a low credit score is keeping you from getting a better mortgage rate, here are some ways to improve your credit score:
First, be sure to obtain a complete copy of your credit report:
-
- Experian
http://www.experian.com
1-888-397-3742 - Equifax
http://www.equifax.com
1-800-685-1111 - TransUnion
http://www.transunion.com
1-800-888-4213
- Experian
Next, take some time to improve your score with these tips:
- Search for Errors – Review your credit report line-by-line, searching for errors, omissions, duplications and “common name” errors. If you find an error, contact the credit bureau. You’re allowed to add 100 words or less to reports on questioned items.
- Make Payments on Time – Set up payment reminders on your accounts to help you avoid late payments. Making sure you are diligent with payments is crucial when applying for a loan that you could potentially be paying on for the next 30 years.
- Pay Down Debt — Reduce your debt as much as possible by paying off any accounts you’re able to.
- Get a Credit Counselor – Credit counselors are available through the credit bureaus and local government agencies.
Learn more about the numbers that determine your buying power on our blog.
Your Home Loan
Whether you’re a first-time homebuyer or looking to purchase your next home, PrimeLending is ready to help you make the next step in your homebuying journey. Connect with one of our qualified loan experts to run your numbers and talk about your options.
