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Credit Matters: Improving you credit score in preparation for buying a home

You know the tremendous benefits of homeownership and you are motivated! Here are the first steps toward purchasing your new home.

Lenders will look at

ü Your employment history and your identity

ü Inquiries made on your credit

ü How you have paid your debts in the past

Your credit score is determined by taking each of the following five sections of your credit report and weighting them according to a set standard.

  • Payment history: 35%

  • Outstanding debts: 30%

  • Length of your credit history: 15%

  • Types of credit you've used: 10%

  • Amount of new credit: 10%

STEP 1: Pull all three of your credit reports from

Look for the following:

Highest balances compared to available credit (pay these down)

Any delinquencies: 30, 60, 90 days late and make arrangements to fix these to become current

Charge-offs, and old, closed accounts. Attempt to have these removed, particularly if they are over 5 years old.

Dispute anything fraudulent

Step 2: Setting your credit score goal

Aim for a 680 minimum score. Over 700 is much better. The goal is to buy a house, but you want the best interest rate.

Lower Interest Rate =Lower monthly payments & less paid overall on the life of the loan.    Step 3: Improving your score

1) Pay down revolving debt.

2) Making bill paying automatic. Set up electronic auto payment so you’re always on time.

3) Do not open a lot of new accounts. Instead, keep and maintain your older accounts.

4) Contact your creditors if youre having trouble. Most creditors are willing to work with you. They can set up a payment schedule, because they’d rather see you make smaller payments than miss payments. Just ask!

5) Consider applying for a secured credit card. Find a company that reports to the credit reporting agencies.

6) If you are in need of extra help, select a non-profit credit counseling service to help you make payment arrangements to pay down debt.


Give Yourself Some Time

If your credit score needs some work, there is no quick fix. Rebuilding or improving your credit score takes time. Negative incidents remain on your credit history for a set period of time:  • Delinquencies: 7 years  • Bankruptcies: 10 years  • Unpaid tax liens: 10 years


Remember, patience and time are the key. You will achieve your goal of homeownership.

 I am here to guide you every step of the way.

Let’s get started!

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