Brenda Cahoon - Burlington Ma Real Estate, Billerica MA Real Estate, Woburn MA Real Estate


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.        




Having a high credit score is one of the most important and helpful things you can achieve before buying a home. A solid credit history will give you a better chance of being approved for the home loan you want and getting a lower interest rate so that you know you’re getting a good deal on your first home.

But, as any renter can tell you, it can sometimes be difficult to lift your credit score when you’ve got so many other things to worry about.

In today’s post, I’m going to cover the best ways to build credit while renting an apartment so you can lift your score to an amount that will help you achieve your goal of homeownership.

1. Take over the bills

If you live with roommates or with your family, one good way to start building your credit score is to simply put more bills in your name.

If you’re certain that you’ll be able to make on-time payments on them each month, this can be a way to boost your score without much thought.

Keep in mind, however, that not all utility companies report your payments to credit bureaus, so it’s a good idea to check that yours does before putting the bills in your name.

2. Become an authorized user

If taking out new credit isn’t an option for you, becoming an authorized user on someone else’s credit account can help you increase your score.

Be sure to find out whether the credit issuer reports payments for authorized users before taking this step. And, once you’re sure that they do, you can be added to the account without changing anything about your spending.

3. Convince your landlord to report your rental payments

In most cases, rental payments aren’t reported to the credit bureaus. However, it is becoming more common. Check to see if your landlord uses a service like PayYourRent or RentTrack. If not, consider asking them to try it out.

4. Solving the “no credit” problem

Since we all start off with a blank slate in terms of credit history, some renters have the issues of not having enough credit information to start building their score.

If this is the case, it might be a good idea to open your first credit account. But, wait! Before you start racking up debt on your first credit card, take a minute to make a wise plan.

First, don’t change your spending habits just because you have credit. Pick a card that offers rewards in the form of cash back, and only use your card for things like gas and groceries that will help you earn points.

Then, set your card to auto-pay in full each month so that you never start accruing interest. This way, you’ll build your credit score and earn money (in the form of rewards or cash back), making it a win-win.


One of the most important factors that many home buyers face is that of their credit score. You have the right to get one free credit report per year. There are also many different apps and websites that keep you updated on your credit score and any changes in your credit report. These programs even guide you in how to improve your score. 


Why Do We Have Credit Scores? 


A credit score is a number that shows how creditworthy a person is. Lenders look at this score in order to assess how risky a person may be to lend to. This lessens the potential risks that the lender may face, keeping people who may be at high risk for defaulting from securing a loan in the first place. 


What’s A Good Score?


Credit scores range from 300 to 850, with 850 being the highest score that you can get. A credit score of 700 or above is considered good. A credit score above 800 is seen as excellent. The bottom line is that the better your credit score is, the more reliable of a borrower you will be seen as by lenders. 


If your credit score is less than stellar, however, you need to get to work so that you will be able to get loans in the near future. Here’s some steps that you can take to improve your credit:


Pay Off Outstanding Debt 


If you owe anything on medical collection accounts, credit cards, legal judgements; basically any debt that will show up on your credit report, you need to pay these off. Getting rid of debt can help you to increase your credit score more quickly. 


Rebuild Your Credit


You’ll need to keep up any accounts that you have with good payment history and maintain the good work. You should be diligent to maintain those on-time payments for an increased good payment history. Even if you have accounts that have had late payments previously, you can still work to get the accounts back in good order. 


If you don’t happen to have any existing credit accounts, you’ll need to get one in order to begin establishing credit. A good way to do this is to apply for a credit card and only charge what you can afford each month in order to help establish a credit history.     

Look At Your Whole Financial Picture


Aside from your credit score, you’ll need to take a look at your bigger financial picture. Everything from the amount of savings that you have available to how much of a home you’ll be able to afford is important. You need sufficient income so that you’ll be able to buy a home and provide a down payment along with money to pay closing costs. 


Once you start investigating your credit score and how to improve it, you’ll be on your way to better financial health.


Applying for your first home loan can seem scary or daunting to many first-time homeowners. However, this process, if done correctly, can save you thousands or tens of thousands of dollars on interest over the lifetime of your loan.

Before you apply for a loan, there are several documents you’ll want to gather and steps you’ll want to take to ensure the application process goes smoothly. In today’s post, we’ll talk about one specific aspect of the mortgage application process--credit scores.

Credit scores may seem confusing. However, since they can so drastically affect your home loan interest rate, it’s important to understand their implications.

Credit checks and mortgages

One of the things that all lenders will want to see before approving you for a home loan is your credit score. If you’re thinking of applying for a mortgage, odds are that you’ve been working to build credit by paying off loans and credit cards on time each month.

The three main credit bureaus in the U.S. are all required to give you a yearly free credit report. This is a detailed document that outlines your lines of credit, payment dates, and amounts. It’s a good idea to get a detailed credit report and check for errors before applying for a loan.

Unlike a hard “credit inquiry,” a free report does not affect your credit score, so you don’t have to worry about dropping a few points by requesting one of these reports.

When applying for a mortgage, however, lenders will perform a hard credit inquiry to determine your borrowing eligibility. This is a part of the pre-approval process and is typically unavoidable.

This is important to note if you are planning on applying to multiple lenders. Be aware that each “prequalification” and “preapproval” may come with a temporary drop in your credit score.

Since credit inquiries make up a total of about 10% of your credit score, these inquiries can make a difference in the short term. For this reason, it’s a good idea to avoid opening new cards or taking out other loans (such as an auto loan or student loan) within six months of your mortgage application.

If you aren’t sure of your current score, you can always check for free from websites like Credit Karma and Mint.

One last thing to note about credit scores and their relationship to mortgages is that most lenders use a specific type of score known as a FICO score. In fact, every adult in the United States with a credit score will have three FICO scores, one from each major credit bureau.

So, when checking up on your credit score, it’s good to remember that each score will be slightly different and your lender’s score may not reflect what you see online.




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