Your credit score: What it says about you and how it impacts home buying

Buying a home is simple, right? Just save up some money, contact a realtor, and make an offer on your dream home.
Not so fast! In the months (even years) leading up to the purchase of your first home, it’s important to lay the groundwork to make you the perfect candidate for a home loan with a reasonable interest rate. As the Washington Post reports, your credit score “one of the main factors lenders look at when determining whether you qualify for a loan.” To lenders, your credit score indicates how risky your spending history is, and can even tell them if you’ve had red flags in your past like delinquent accounts, a bankruptcy, or a high number of recent credit applications.
First things first: what’s your credit score? 
Many credit card providers offer built-in apps which give you an idea of your credit score. But to be sure you know exactly what potential lenders will be looking at, it’s a good idea to order an official credit score report. A simple search engine inquiry will give you thousands of sources for credit, but choose wisely to protect your personal data. has a great guide to choosing a credit reporting service to help you navigate your options ( The best services will report your scores from all Big Three Credit Bureaus: Equifax, Experian, and TransUnion. These sources may use your information in different ways to compile their reports, so it’s important to get all three.

Protecting your credit is key

Developing strong credit behaviors is crucial to setting yourself up for home-buying success. We all know the basics — pay every bill on time, don’t overcharge your card, etc. But what else can you do?
  • Don’t close that old card! The length of your longest line of credit is a huge factor in your credit score. For younger people, this means that removing one older line of credit can compromise years of hustling to pay bills on time.
  • Ask for an increase on your credit line. Your utilization rate (the percentage of credit used relative to the amount available) is also a big factor in your credit score. Yes, you can spend less on your credit card. Many credit card companies make it easy to request an increase to your credit line as well with no phone call. Once approved, your utilization rate will lower if you keep your spending the same.
  • Scour your reports for errors. The FTC reports that 1 in 5 people have an error on their credit report that was disputed and corrected.
So as you can see buying a home takes time and thought. When you start your planning make sure you take a good look at your credit. It will save you time and money.

Thank you
Lauren Thomas for this great informatiom. 

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