Thinking about buying a home? Congratulations! This is a big life moment, one that will require a lot of attention to detail, responsibility and research. And good for you for already beginning your research. But while you might feel ready to make the leap and invest, there still are factors that can hold back even the most qualified of potential homeowners. One of the most common of these hurdles is bad credit. Having a bad credit score can make mortgage lenders weary of offering you money and cause your interest rates to soar through the roof. But if you’re just getting acclimated to the idea of buying a home and don’t think your credit is where you want it to be, don’t worry, there are things you can do to improve your score, whether you’re looking to change from bad to good, or good to better. Here, everything you need to know about your credit score if you’re looking to buy a house.
Credit Score Range:
You might already know this, but just to recap: A credit score is a three-digit number based on your credit history. It’s determined by an algorithm that takes into account the number of open credit accounts you have (like your rent, credit cards and student loans), your purchase history, your payment history and any outstanding balances. It can range from 300 (the lowest possible score) to 850 (the highest possible score).
Don’t know your credit score off the top of your head? There are many places to get a good estimate for free. If you have a credit card, your provider might print your score on your monthly statement or have it available via their online user portal or app.