What You Need To Know About Credit Scores

by Teresa Boyd 12/10/2018

If you are thinking of buying a home in the near future, there’s one three-digit number that could be oh so important to you. That number is your credit score. Read on to find out how a credit score can affect you and the steps you can take to be sure that your credit is in good standing when you head to apply for a mortgage. 


What Is A Credit Score?


Your credit score is checked by lenders of all kinds. Every time you apply for a loan or a credit card, there’s a good chance that your credit score is being pulled to see if you qualify for the loan. Your credit score is calculated based on the information on your credit report. This information includes:


Payment history

Debt-to-credit ratio

Length of credit history

New credit accounts opened


The areas with the most impact on your score is your payment history and your debt-to-credit ratio. This means that on-time payments are super important. You also don’t want to get anywhere close to maxing out your credit cards or loan amounts to keep your score up. 


What’s A Good Score?


If you’re aiming for the perfect credit score, it’s 850. Most consumers won’t reach that state of perfection. That’s, OK because you don’t have to be perfect to buy a house. If your score is 740 and above, know that you’re in great shape to get a mortgage. Even if your score is below 740 but around 700 or above, you’ll be able to get a good interest rate on your mortgage. Most lenders typically look for a score of 620 and above. Keep in mind that the higher your credit score the better your interest rate will be.    



What If You Lack Credit History?


Most people should get a credit card around age 20 in order to begin building credit. You can still qualify for a mortgage without a credit history, but it will be considerably harder. Lenders may look at things like your rent payments or car payments. Lenders want to know that you’re a responsible person to lend to. 


What If Your Score Needs Help?


It doesn’t mean you’re a hopeless case if you lack good credit. Everything from errors on your credit report to missed payments can be fixed. The most important thing that you can do if you’re buying a home in the near future is to be mindful of your credit. Keep an eye on your credit report and continue to make timely payments. With a bit of focus, you’ll be well on your way to securing a mortgage for the home of your dreams.        



About the Author
Author

Teresa Boyd

I relocated to Ocean Isle Beach in 2002. Prior to that I lived in Maryland and worked for over 20 years in Washington, D.C. for the D.C. Court system and an office that prosecutes attorneys. I began my real estate career in 2006. 

The first year I worked as a real estate agent, I received the Rookie of the Year award. Each year since I have been recognized as a multi-million dollar sales agent and have consistently been one of the top producers in the company. Coldwell Banker National has recognized me with a Sterling Award for the number of sales transactions closed, The President’s Circle Award, and Coldwell Banker Sloane awarded me with the 2017 TOP PRODUCER Award for the highest sales volume. Long story short, I work hard for my buyers and sellers and it shows in my numbers!

I have been married for 34 years, have four children and eight grandchildren. I have been enjoying the South Brunswick Island area of North Carolina for over twenty years. Part of that time I was a vacationer here but the past 16 years I have called this my home. 

Call me and put my experience & knowledge to work for you. I look forward to working with you!