The importance of good credit score when buying or refinancing your home
Without credit, buying a house becomes much more difficult. After all, not many of us have enough money in the bank to be able to write a check for a couple hundred thousand dollars. And, if you can’t pay cash, you’ll need a loan.
Which is why your credit score is so important. It’s one of the ways a lender gets a feel for your financial habits and how responsible you are with your money.
In short, your credit score will affect, not only the terms of the loan and your interest rate, but whether or not you even qualify at all.
So you’re going to want to enter the home buying process with as good a score as you can.
The first step is knowing what yours is, then checking your history for any errors or issues that can be fixed. But, once you’ve done that, how do you know where you stand?
Well, typically a score over 700 is considered good, with anything over 800 considered excellent.
Most scores will fall somewhere between 600 and 750. Overall, Americans’ credit has been improving lately. In fact, according to Ellie Mae’s most recent Origination Insight Report, FICO scores on all loans last month increased to 750.
More: See how bad credit affects your home buying
Check to see if you qualify first
If you’re shopping for a home loan, check to see if you qualify first then compare your loan options.