How to Improve your credit score before buying a home

Lenders approve mortgage loans to those potential homebuyers with the best credit scores over 700. Yes, I know it’is advertised that you need 640+ for an FHA loan however those are only guidelines; it’is the lenders that will ultimately approve your loan and new strict rules with higher credit scores are required.

However you can improve your credit and boost your credit score in just a few months.
First, to improve your credit score, it's important to know where you stand so you must request a free credit report and work on the negative trade lines first.

Here's a plan for a quick boost to your credit score:

• Apply for an installment loan

You'll get the fastest improvement in your scores if you show you're responsible with a major loan: (personal loans, auto, mortgages and student loans). If you don't already have an installment loan on your credit report, consider applying for a small personal loan or buy a small car that you can pay back over time. Nothing expensive, just something that is manageable.

• Get a credit card if you don't have one

Don't fall for the myth that you have to carry a high balance to have a good score. You don't, however you need to show responsibility so that means you will have to use the credit card, sparingly. Having and using a credit card can really build your score quickly. If you can't qualify for a regular credit card, consider a secured credit card.

• Pay down your credit cards

The most dramatic boost to your credit score will come from paying down your accounts such as credit cards. Not paying it off, just paying it down. Lenders like to see a big gap between the amount of credit you're using and your available credit limits.

• Use your cards lightly

Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month. The underwriters will look at your habits and if you are running up your balances each month they have to determine will you have reserves each month to pay your mortgage on time.

Many new homebuyers are not aware of the process to get a mortgage loan; your application is run through an initial automated model of a loan method to get early approval, but that is not the entire process.

The underwriters review all the paperwork and scrutinize your credit history to see if you are a good risk in order to use their money. During the process they review how you pay your bills and the probability of you running into trouble.
So the use of your credit is examined in depth.

Everyone can repair and improve their credit scores but it doesn't happen overnight. If you plan on applying for a mortgage loan and you need to work on your credit, have a 6 month plan and you will become homeowner before you know it.


Loudoun County and Northern Virginia Real Estate Sales and Solutions – Helena Talbot, Broker. I specialize in helping buyers and sellers invest in real estate in the Northern Virginia area to include Loudoun County and surrounding areas including Clarke, Fauquier, Prince William and Fairfax Counties. Some of our local neighborhoods include Leesburg, Ashburn, Sterling, Potomac Falls, Brambleton, Broadlands, Lansdowne, River Creek, Belmont Country Club, Beacon Hill, Shenstone, Waterford, Lovettsville, Lucketts, Purcellville, Hamilton, Round Hill and Bluemont. Cell 703.727.9885 Office 703.574.3800