Patience is Key

If you’re thinking about buying a house in the next few years, you might want to work on improving your credit score. The Federal Reserve reports that 90% of U.S. home loans taken out in the first quarter of 2019 were by home buyers with a score of at least 650, and 75% had a score higher than 700. The average credit score this year sits at 759, the report found, and only 10% of borrowers had scores under 647. FICO credit scores range from 300 to 850, and the national average is 704.

Any score between 700 and 749 is typically deemed “good,” while scores from 650 to 700 are “fair.” Excellent scores are usually those over 750. While you can likely qualify for a home loan with a rate lower than the median, a higher score typically means better interest rates and loan options. A multitude of other factors can also influence the approval process, including the cost of the home, the size of the down payment and your income. But the score is a significant factor. Remember, raising your score won’t happen overnight. Paying your bills on time and lowering credit usage are long-term habits that need to be built and cultivated. To improve your score, patience is key.

Source: CNBC