Written by: Mike Laquerre
If you’re like a lot of first-time home buyers you might be wondering, “What credit score do I need to buy a home?”
A credit score is a number assigned to a person that indicates to lenders their capacity to repay a loan. This number is based on your credit history and includes your past and current debts, missed or late payments to creditors, bankruptcies, tax liens, judgments, etc.
Your credit score number is used to determine how much of a credit risk you might be for the lending institution. Landlords use it to determine if you are more likely to be a person that will stop paying rent. Banks use it to determine how likely you are to default or run late with payments on your credit card.
You can order a copy of your individual credit report once per year for free. The report will contain information from the three main reporting bureaus: Experian, TransUnion, and Equifax. It is of the utmost importance that you know your credit score ahead of time before deciding whether it’s the right time to consider purchasing a home. You can order your free copy at www.annualcreditreport.com.
Home purchases revolve around credit scores because home loan eligibility is built on your creditworthiness. Excellent credit will provide you with access to all of the best loans, meaning lower interest rates.
So what exactly constitutes excellent, good and bad credit? The information below is not exact, but instead is listed here to give you a general idea of the score ranges and what the numbers are typically taken to mean by a creditor:
- Excellent credit: 740 – 850
- Good credit: 680 – 740
- Acceptable: 620 – 680
- Subprime: 550 – 620
- Poor credit: 300 – 550
There isn’t a sign hovering over your head to indicate whether you have good or bad credit, but that, however, all changes the moment you choose to make a larger financial decision that will be dependent on credit. And nothing you do will be more dependent on your credit score than buying a home.
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About Adams Homes:
Founded in 1991, Adams Homes is known as the premier home builder and is one of the largest privately-held home building companies in the southeast. Adams Homes has built more than 40,000 new homes since 1991 and builds in seven states including new homes for sale in Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee with corporate headquarters in Gulf Breeze, Florida.
Discover all Adams Homes’ communities, model homes and homes for sale on our website, www.AdamsHomes.com. We have new homes for sale perfect for the first-time buyer, move-up home buyer, who desires to upgrade to a more accommodating new home, and the empty nester who desires to downsize to a smaller home.
While you’re at our website, explore our mortgage calculator and obtain financing information.