{"id":10344,"date":"2016-04-20T10:00:39","date_gmt":"2016-04-20T10:00:39","guid":{"rendered":"https:\/\/louisvillehomesblog.com\/?p=10344"},"modified":"2023-08-19T15:22:31","modified_gmt":"2023-08-19T15:22:31","slug":"credit-score-needed-buy-home-2016","status":"publish","type":"post","link":"https:\/\/trepryor.com\/blog\/credit-score-needed-buy-home-2016\/","title":{"rendered":"Credit Score Needed to Buy a Home in 2016"},"content":{"rendered":"\n<p>Anyone looking to purchase a new home should be <em>very<\/em> interested to know their credit score. After all, it&#8217;s <strong>integrally linked<\/strong> to today&#8217;s\u00a0home buying process.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"600\" height=\"351\" src=\"https:\/\/trepryor.com\/blog\/wp-content\/uploads\/2016\/04\/credit-score.jpg\" alt=\"Credit Score image\" class=\"wp-image-10348\" srcset=\"https:\/\/trepryor.com\/blog\/wp-content\/uploads\/2016\/04\/credit-score.jpg 600w, https:\/\/trepryor.com\/blog\/wp-content\/uploads\/2016\/04\/credit-score-300x176.jpg 300w\" sizes=\"auto, (max-width: 600px) 100vw, 600px\" \/><figcaption class=\"wp-element-caption\">Your credit score plays a larger role in your ability to purchase a home now than ever before.<\/figcaption><\/figure>\n\n\n\n<!--more-->\n\n\n\n<p>Decades ago, credit score was <em>much less of a factor<\/em> in whether you could, or could not, purchase a home but that&#8217;s not the case in 2016.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Credit Score Survey Results<\/h2>\n\n\n\n<p>A new survey by <a href=\"http:\/\/www.experian.com\/\" target=\"_blank\" rel=\"noopener\">Experian<\/a>&nbsp;targets current thoughts on credit scores. Here are some highlights before the full survey is released later today on their website.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>34% of future home buyers say their credit score might hurt their ability to purchase a home<\/li>\n\n\n\n<li>45% have delayed purchases to improve their credit score<\/li>\n\n\n\n<li>60% are actively paying off debt<\/li>\n\n\n\n<li>28% are purposefully keeping their&nbsp;credit card balances low<\/li>\n\n\n\n<li>15% are protecting their credit information from identity theft<\/li>\n<\/ul>\n\n\n\n<p>From the&nbsp;Experian press release:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>\u201cYour credit profile is one of the factors that can have a substantial impact on securing a home loan because it is used by lenders as an indicator of your financial health,\u201d said Rod Griffin, director of Public Education at Experian. \u201cConsumers planning to purchase a home should check their credit scores and reports to see where they stand. From there they can develop a financial plan so they are in the best place to try to secure the loan they desire.\u201d<\/p>\n<\/blockquote>\n\n\n\n<p>I think it&#8217;s safe to say that we are aware of the <strong>importance of a good credit score<\/strong>, especially as it relates to buying a home. &nbsp;But what exactly are some reasonable goals? Is it possible to purchase a home with a low credit score? What exactly is a <em>low<\/em> credit score?<\/p>\n\n\n\n<p>You&#8217;ve come to the right place to get answers to these questions and more.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Current Credit Score Minimums<\/h2>\n\n\n\n<p>In order to qualify for an <strong>FHA Loan<\/strong>, here are some guidelines from&nbsp;<a href=\"http:\/\/www.fha.com\/fha_credit_requirements\" target=\"_blank\" rel=\"noopener\">Credit Requirements for FHA Loans<\/a>.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>If you plan to make the lowest down payment possible, currently 3.5% of the home&#8217;s sale price, then your&nbsp;credit score must be at least 580.<\/li>\n\n\n\n<li>If your credit score is lower than 580 then the down payment would need to be at least 10%.<\/li>\n<\/ol>\n\n\n\n<p><strong><span style=\"color: #ff0000;\">Note<\/span><\/strong>: Keep in mind, these are guidelines and are not set in stone. Lenders do have the discretion to require more rules or fewer rules for\u00a0their clients; balancing risk and reward in the free market.<\/p>\n\n\n\n<p>When looking at <strong>Conventional Loans<\/strong> that are\u00a0backed by Fannie Mae or Freddie Mac, the minimum score required is set at 620. Most of the time, the borrower can get a better interest rate with a Conventional loan and there are fewer requirements when it comes to the home itself.<\/p>\n\n\n\n<p>But I did just say &#8220;most of the time.&#8221; This underscores the importance of finding a <em>trusted loan specialist<\/em>. Great Realtors know the basics of home loans. Loan specialists are the true experts in\u00a0current rules, rates, and regulations.<\/p>\n\n\n\n<p>When generically asking, &#8220;What credit score is needed to buy a home?&#8221; If yours is <strong>660 or higher<\/strong>, you are in good shape. Lenders see that you are reasonably on top of things and are quite likely to offer you a loan.<\/p>\n\n\n\n<p>Of course, a credit score of 700 or even 800 is even better as&nbsp;lenders will court you with a&nbsp;lower interest rate.<\/p>\n\n\n\n<p>If you are someone who has served our country in the military, you likely qualify for a <strong>VA loan<\/strong>. The Department of Veterans Affairs (VA) offers specialized deals for their members, many times with a zero-down option. For more info, head over to this <a href=\"https:\/\/trepryor.com\/blog\/va-loan-primer\/\" target=\"_blank\" data-type=\"link\" data-id=\"https:\/\/trepryor.com\/blog\/va-loan-primer\/\" rel=\"noreferrer noopener\">VA Loan Primer<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Steps to Improve Your Credit Score<\/h2>\n\n\n\n<p>What if you find that your credit score is less than ideal? Here are the five main things to work on. They are ranked in order of importance.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. Payment History<\/h3>\n\n\n\n<p>Making timely payments is key&nbsp;to having a top-tier credit rating. It all starts by not biting off more than you can chew but after that, when the bill says &#8220;Due Date&#8221; take that very seriously.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2. Amounts Owed<\/h3>\n\n\n\n<p>You might have thought this should have been first, right? Actually, it&#8217;s second, which could be a <em>good<\/em> thing. Your FICO credit score looks at how many lines of credit you have and the balance on each. Make a plan to regularly reduce your debt and that will greatly enhance your score.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3. Length of Credit History<\/h3>\n\n\n\n<p>The longer you&#8217;ve been using credit is seen as a good thing by this calculation. Go figure!<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4. New Credit<\/h3>\n\n\n\n<p>Each time you open a new source of credit, your score takes a hit. I&#8217;ve heard other Realtors tell horror stories about how one of their clients bought some new furniture with &#8220;90 days same as cash&#8221; before the closing. Of course, this lowered their credit score below the required baseline and thus, killed the deal.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">5. Types of Credit Used<\/h3>\n\n\n\n<p>Lastly, your credit\u00a0score takes into consideration all of your credit cards, store accounts, and other loans. It looks at the number and makeup of your complete credit landscape.<\/p>\n\n\n\n<p>Taking proactive steps to improve each of these five items will improve the&nbsp;credit score needed to buy a home.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Additional Help<\/h2>\n\n\n\n<p>If you&#8217;re a first-time home buyer, this may seem like a daunting task. Never fear! I&#8217;ve put together the\u00a0<a href=\"https:\/\/trepryor.com\/articles\/top-10-tips-for-louisville-first-time-home-buyers.html\" target=\"_blank\" rel=\"noopener\">Top 10 Tips for Louisville First Time Home Buyers<\/a>\u00a0full of great information, just for you.<\/p>\n\n\n\n<p>Still have questions? If you live in Louisville or are considering a move to our great city, please <a href=\"http:\/\/trepryor.com\/contact.html\" target=\"_blank\" rel=\"noopener\">contact me<\/a>! I&#8217;m always happy to help.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Anyone looking to purchase a new home should be very interested to know their credit score. After all, it&#8217;s integrally linked to today&#8217;s\u00a0home buying process.<\/p>\n","protected":false},"author":2,"featured_media":10348,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ocean_post_layout":"","ocean_both_sidebars_style":"","ocean_both_sidebars_content_width":0,"ocean_both_sidebars_sidebars_width":0,"ocean_sidebar":"0","ocean_second_sidebar":"0","ocean_disable_margins":"enable","ocean_add_body_class":"","ocean_shortcode_before_top_bar":"","ocean_shortcode_after_top_bar":"","ocean_shortcode_before_header":"","ocean_shortcode_after_header":"","ocean_has_shortcode":"","ocean_shortcode_after_title":"","ocean_shortcode_before_footer_widgets":"","ocean_shortcode_after_footer_widgets":"","ocean_shortcode_before_footer_bottom":"","ocean_shortcode_after_footer_bottom":"","ocean_display_top_bar":"default","ocean_display_header":"default","ocean_header_style":"","ocean_center_header_left_menu":"0","ocean_custom_header_template":"0","ocean_custom_logo":0,"ocean_custom_retina_logo":0,"ocean_custom_logo_max_width":0,"ocean_custom_logo_tablet_max_width":0,"ocean_custom_logo_mobile_max_width":0,"ocean_custom_logo_max_height":0,"ocean_custom_logo_tablet_max_height":0,"ocean_custom_logo_mobile_max_height":0,"ocean_header_custom_menu":"0","ocean_menu_typo_font_family":"0","ocean_menu_typo_font_subset":"","ocean_menu_typo_font_size":0,"ocean_menu_typo_font_size_tablet":0,"ocean_menu_typo_font_size_mobile":0,"ocean_menu_typo_font_size_unit":"px","ocean_menu_typo_font_weight":"","ocean_menu_typo_font_weight_tablet":"","ocean_menu_typo_font_weight_mobile":"","ocean_menu_typo_transform":"","ocean_menu_typo_transform_tablet":"","ocean_menu_typo_transform_mobile":"","ocean_menu_typo_line_height":0,"ocean_menu_typo_line_height_tablet":0,"ocean_menu_typo_line_height_mobile":0,"ocean_menu_typo_line_height_unit":"","ocean_menu_typo_spacing":0,"ocean_menu_typo_spacing_tablet":0,"ocean_menu_typo_spacing_mobile":0,"ocean_menu_typo_spacing_unit":"","ocean_menu_link_color":"","ocean_menu_link_color_hover":"","ocean_menu_link_color_active":"","ocean_menu_link_background":"","ocean_menu_link_hover_background":"","ocean_menu_link_active_background":"","ocean_menu_social_links_bg":"","ocean_menu_social_hover_links_bg":"","ocean_menu_social_links_color":"","ocean_menu_social_hover_links_color":"","ocean_disable_title":"default","ocean_disable_heading":"default","ocean_post_title":"","ocean_post_subheading":"","ocean_post_title_style":"","ocean_post_title_background_color":"","ocean_post_title_background":0,"ocean_post_title_bg_image_position":"","ocean_post_title_bg_image_attachment":"","ocean_post_title_bg_image_repeat":"","ocean_post_title_bg_image_size":"","ocean_post_title_height":0,"ocean_post_title_bg_overlay":0.5,"ocean_post_title_bg_overlay_color":"","ocean_disable_breadcrumbs":"default","ocean_breadcrumbs_color":"","ocean_breadcrumbs_separator_color":"","ocean_breadcrumbs_links_color":"","ocean_breadcrumbs_links_hover_color":"","ocean_display_footer_widgets":"default","ocean_display_footer_bottom":"default","ocean_custom_footer_template":"0","ocean_post_oembed":"","ocean_post_self_hosted_media":"","ocean_post_video_embed":"","ocean_link_format":"","ocean_link_format_target":"self","ocean_quote_format":"","ocean_quote_format_link":"post","ocean_gallery_link_images":"off","ocean_gallery_id":[],"footnotes":""},"categories":[680],"tags":[1371],"class_list":["post-10344","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-residential","tag-credit-score-needed-to-buy-a-home","entry","has-media"],"_links":{"self":[{"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/posts\/10344","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/comments?post=10344"}],"version-history":[{"count":2,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/posts\/10344\/revisions"}],"predecessor-version":[{"id":20301,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/posts\/10344\/revisions\/20301"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/media\/10348"}],"wp:attachment":[{"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/media?parent=10344"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/categories?post=10344"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trepryor.com\/blog\/wp-json\/wp\/v2\/tags?post=10344"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}