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What does my credit look like?

What credit score do you need in order to purchase a home?


One of the most common concerns for first time home buyers is whether their credit is strong enough to purchase a home or not. Whether your score is to low can be subjective. A "good" or "bad" credit score may very depending on the type of loan you receive and which loan office you use. Mortgage lenders determine their rules depending on a few different things, such as the economy. There are many different type of loans that a person can get. Conventional and FHA are pretty common loans. Conventional loans usually range a little higher for credit score since they don't offer as much security. Conventional loans might require a score around 620. FHA and VA loans are around 580 and jumbo loans around 680.

The reason for credit scores is to help the bank understand your likely hood od paying off your loan. If you have a lot of debt then most likely you can not pay off a mortgage, it shows that you either can not pay back your mortgage or you have to many other financial obligations. Some other things that your credit score might reflect is recently opened credit lines, type of credit, and your credit history length.

Working on your credit score can be a process but once you have a good credit history then you have what I like to call leverage. You are more likely to recieve loans, banks trust you more to hand your money upfront that you can use to reinvest. Understanding your credit is an important part of your future if you want to build wealth and businesses.

Here are the best habits to improve your credit score:

  • Pay your bills on time — Payment history accounts for 35% of your FICO credit score

  • Lower your credit utilization — Increase your debt payments temporarily or request a credit limit increase

  • Avoid new credit lines — Hard credit inquiries are performed for a new line of credit and can affect your credit score for the next six months

  • Don’t close old accounts — Keep old credit lines open and catch up on old payments or delinquencies

  • Be patient — It can take up to 6 months to make big changes in your credit score, so do the work and wait it out


I am not a financial advisor. The article above is tips that I have learn through my own experience.

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