Improving Your Credit Score to Buy a Home

Apr 12, 2023

Improving Your Credit Score to Buy a Home

Having a good credit score is essential in today’s housing market. It is one of the biggest factors in buying a home. Without a good credit score, buyers may not be able to buy a home even with good income. In short, you can miss out on homeownership if you have  a low credit score.

Why Do I Need a Good Credit Score?

Having a good credit score will show that the person is financially responsible. It shows  a good history of making payments on other lines of credit and loans. When lenders see this, they know that there is less risk to lending them money for a mortgage. Ultimately this gives the buyer more options of mortgage providers to choose from. 

Banks want to lend you money so that they get paid.  Lenders will know that there will be more competition for those buyers who have a good credit score, so they will offer lower interest rates, which means less money out of the buyers pocket in the long run.

According to Equifax, a good credit score is anything from 670 to 739. A fair credit score is considered to be 580 to 669. There are some lenders that look for a score of 600 or more when buying a house. However, having a score within the good range gets the attention of more lenders and will qualify the buyer for better rates. It is possible to get a mortgage with less than a 600 credit score. That, however, typically means that the buyer needs to put more money down upfront.

How Do I Improve My Score?

The first step to getting and maintaining a good credit score score is constantly monitoring it. There are several websites that allow people to view a credit report for free. such as CreditKarma. Once that is done, make sure that all of the information on the credit report is correct. Any incorrect information can be contested and removed from the credit report, improving your score. Incorrect information is more common in the cases where delinquent accounts were sold to collection agencies. Looking into these first is a good place to start.

If there are delinquent accounts, you should take care of them. Contact the companies that hold your delinquent accounts. The accounts might have been sold to a collection agency, in which case they would need to be contacted rather than the original creditor. Then work with them to pay off the delinquencies. Often payment plans can be set up based on the financial circumstances. You can also offer to pay off with a discount. Make sure to get a proof of payment and check your credit. It may take a few weeks to be reflected on your credit report. 

Lastly, you can open accounts that report to the credit bureaus, maintaining low balances, and paying bills on time. These new accounts could be used for an occasional coffee or paying small bills. As long as the payment is made consistently on time while having a low ratio of credit usage, the credit score will begin to increase.

I Have Improved My Credit Score, Now What?

Now that a good credit score has been established and you are ready to buy a home, make sure to take a look at our available homes at and Once you find one that you love, we can submit a loan application to our lenders. Becoming a homeowner is within reach, contact us today about any of the homes that you want!



National Foundation of Credit Counseling