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5 Home Buyer Credit Score Tips

If you’re considering buying a home anytime soon, here are 5 home buyer credit score tips:

  1. Payment History – 35%

This is the most important and biggest part of the 5 home buyer credit score tips. Making your payments on time has a positive impact on your overall score. Late payments, collections, judgments, bankruptcies and previous short sales and foreclosures have a negative impact. The more recent the incident, the more impact it will have on your credit score.

  1. Balance Owed – 30%

This is the ratio between your outstanding balance and your available credit. If your ratio is under 30%, it shows you have good credit management. This is the 2nd most important of the 5 home buyer credit score tips. Focus on paying down your maxed out accounts.

  1. Credit History – 15%

The longer you have an established account, the more impact it has on your score. That’s why they say not to close long standing accounts.

  1. New Credit – 10%

Newly established credit has no history and can be harmful. Multiple inquiries to your credit report within a six month time period also have a negative impact.

  1. Types of Credit – 10%

You should have a good balance between installment and revolving accounts. Two credit card accounts, one student loan and one car payment is a good mix.

The interest rate you get on your home loan depends on your credit score. The biggest misconception you need to know is your rate is personal to your own situation. Just because your co-worker or your best friend got a certain rate, doesn’t mean you will get that same rate. It all comes down to these 5 home buyer credit score tips.

If you need help getting your credit repaired, call me at (913) 515-3250 or contact me for recommendations. To learn more about buying a home, sign up for our next FREE home buying workshop in Overland Park here.

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