You Don’t Need Outstanding Credit

Fact: Your credit score matters to lenders, and borrowers with higher scores often have lower interest rates and PMI.

Fiction: Credit scores range from 300-850, and this isn’t golf, so higher is better. But don’t worry! Just like you can pass college with a C average, you can also buy a home with fair credit!

Lenders are finance people, and take it from me, the daughter of a CPA: finance people like predictability! The higher a credit score, the less risk a lender feels they are taking on with a loan.

Credit Score Levels:

• Excellent 800-850

• Very Good 740-799

• Good 670-739

• Fair 580-669

• Poor 300-579

There are loan products out there to help people with lower credit scores buy homes. FHA loans with 3.5% down have a minimum score of 580. For borrowers with scores between 500-579, FHA may still be an option, but you will need to put 10% down.

Megan, you may be asking, what if I have poor credit? To that I say, at least you know! The first step to fixing your credit score is being aware that it needs some help. Credit scores are not set in stone! They update each month, and you can speak to a lender or use a financial wellness app to learn the steps toward repairing your credit.