Your credit score plays a major role in home-buying, but many people aren’t sure what lenders are looking for or how their score affects their options. The good news is that you don’t need perfect credit to buy a home in and around Lee's Summit — there are loans available for a wide range of credit scores. Understanding what lenders expect and how to improve your score can help you take confident steps toward homeownership.
Here are helpful tips for homebuyers based on the above infographic:
1. Understand Credit Score Requirements
Data shows 7 out of 10 prospective homebuyers don’t know the minimum credit score required by lenders or that it varies by lender and loan type. In reality, it varies depending on the loan type and lender. For example: FHA loans typically require a lower score, averaging 645, USDA loans average around 684, and conventional loans hover around 738.
2. You Don’t Need Perfect Credit
According to Experian, the minimum credit score to buy a home ranges from 500 to 700. This means that even with less-than-perfect credit, homebuyers have options. Don’t let a less-than-ideal score hold you back.
3. Work With a Trusted Lender
A lender can help you understand the types of loans available for your credit range. They’ll also guide you through steps to improve your score, if needed, before applying.
4. Tips to Improve Your Credit Score
- Pay Bills on Time: Consistency is key. Late payments can quickly bring down your score.
- Pay Down Outstanding Debt: Lowering your credit utilization can significantly improve your score.
- Avoid Applying for Too Much Credit: Hard inquiries can temporarily lower your score, so avoid new credit applications before buying.
5. Know Your Options
Explore different loan programs tailored to various credit ranges, like FHA or USDA loans, which may be more accessible if your score isn’t as high.
6. Credit Scores Are Just One Factor
While your credit score is important, lenders consider other factors like income, debt-to-income ratio, and employment history. A less-than-perfect score doesn’t automatically disqualify you from homeownership.
Take the first step toward homeownership by checking your credit score and connecting with a knowledgeable lender. If you’re curious about your options or need guidance or referrals to trusted lenders, reach out to Great Missouri Homes at 816-328-2887. Let’s find the right path to your dream home!
Hi! I'm Merla Turner, owner of Great Missouri Homes and a local Kansas City area Realtor. I am passionate about all things Lee's Summit—this beloved city is where my family and I do life! Thank you for reading this article. If you have any questions, suggestions, or ideas, call me at 816-328-2887 or fill out the contact form below. And remember - when it's your turn to buy or sell real estate in Lee's Summit, turn to Merla Turner!
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