Myth: I need a high credit score to buy a home.
Truth: Nope!

While it’s true that a high credit score opens up more loan options and better rates, plenty of solid programs exist for buyers with less-than-perfect credit. And you can always take steps to improve your score along the way.

If you’re even thinking about buying in the next year, this is a great time to start focusing on your credit. The good news is that your score doesn’t define your ability to become a homeowner. With a little strategy and the right guidance, you can absolutely make it happen.

First, Let’s Understand How Credit Scores Work

Your credit score is a number that tells lenders how you’ve handled borrowing in the past. It’s based on your history with credit cards, car payments, student loans, and other debt. The score itself usually ranges from 300 to 850 and is drawn from your credit report. The median score is just under 700, depending on which part of the country you’re in. For Washington, we’re sitting at 720.

Lenders don’t look at your income when evaluating your credit score. Instead, they consider:

• Whether you’ve made payments on time
• How much debt you carry
• How long your credit accounts have been open
• Whether you’ve applied for new credit recently
• The types of credit you’ve used

If you’ve had a bankruptcy, tax lien, or collections account, those will show up too, but it’s all part of the bigger picture.

Credit Score Ranges and Loan Options

Here’s how different score ranges typically impact your mortgage options:

• 740 and up: This is the sweet spot. You’ll have access to the lowest interest rates and best loan terms. Lenders are eager to work with you.
• 720 to 739: Still considered excellent. You’ll have strong options and low rates.
• 680 to 719: This is a good score range, but you’ll likely pay a slightly higher interest rate and have fewer loan choices.
• 620 to 660: This is considered fair. You can still qualify for a loan, but the process might take longer and involve more documentation. FHA or VA loans are commonly used in this range.
• Below 620: This is considered poor. Your options become more limited, but some buyers still qualify with FHA loans. You may need to make a larger down payment and work with a lender who specializes in more flexible underwriting.

It’s Not Over If Your Score Is Lower

A lower score never means it’s game over. Many lenders are willing to work with buyers and look at the full financial picture. Some even offer advice on how to raise your score quickly.

Lenders also consider:

• On-time rent payment history
• Your current income and debt-to-income ratio
• How much money you’ve saved
• Any assets like stocks or bonds
• Whether you can make a larger down payment
• If you have a co-signer with strong credit

Even if you secure a loan with a higher rate today, you can refinance later once your credit improves. That means you’re not stuck with that rate forever.

Smart Ways to Improve Your Credit

If you want to give your score a boost, here are simple steps you can start today:

• Always pay on time. Payment history makes up 35 percent of your FICO score.
• Ask for a higher credit limit. This helps improve your credit utilization ratio. Aim to keep balances below 30 percent of your available credit.
• Avoid big purchases while house hunting. That new car or expensive furniture can wait.
• Keep long-standing accounts open. These show your history with credit.
• Request a goodwill adjustment. If you’ve been a reliable borrower and had a one-time slip, your lender might be willing to remove that late mark.
• Check your credit reports regularly. Errors can lower your score, so dispute anything that looks suspicious.
• Stay current on all obligations. Even small fines like parking tickets or late fees at the library can go to collections and hurt your score.
• Switch to a credit union. This might not help directly, but working with a better company can give you more favorable options for all of the above.

You’re Closer Than You Think

Your credit score is important, but it isn’t the only factor. The key is having a plan, knowing your numbers, and taking the right steps to show you’re financially ready.

If you’re unsure where to start or want help evaluating your credit situation, I’m here to chat. We can review your goals, look at realistic timelines, and create a step-by-step approach that fits your life and your finances.

If you missed the previous issues in our Mythbusters series, be sure to check out

• Mythbusters Series Kickoff
• Myth #1 You Can’t Buy A Home with Student Debt
• Myth #2 You need 20% down True or False?

Next week, we’ll dive into another common myth: It’s better to wait before you buy.

Ready to take the next step? Let’s chat over coffee or a cocktail! Schedule a time with me to discuss your homebuying dreams and how we can make them a reality. I’m here to help you every step of the way.

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I hope this helps! Let me know if you need any more changes or if there’s anything else I can do for you.