Credit Score

Get your credit score ready to buy a home
 
In a seller’s market like Colorado, you need to have the right credit score in order to be able to buy a house. Figuring out what that score is, and how to improve the score you already have, is an important part of home buying. If you’re not certain you’re where you need to be, here are a few tips to make the process easier.
 
Check your numbers early
 
Improving your credit score can be done, but it’s not a quick or simple process. Check a trustworthy, free credit site to find out your score the moment you decide to move. The idea that checking your score too often lowers it is a myth. The more aware you are of your score, the more likely you are to keep it high enough to be useful.
 
If your score is low, it’s best to get started fixing it as soon as possible. You’ll have to lower balances on your credit cards, prove you can make regular payments, and pay off any extra loans. All of this takes time, and your score will slowly improve from month to month. The higher you can make your score by the time you go looking for mortgage loans, the better.
 
Do your research
 
Knowing the facts can help you find the loan that works best with your credit score and desired house. You really need a credit score of at least 500 to get approved for a mortgage, though some loans have higher requirements. Even if they don’t, a higher score will save you money. A score of between 500 and 579 require a 10 percent down payment, while a higher score means a 3.5 percent down payment.
 
Your score will also determine what kind of loan you can apply for. An FHA loan usually requires a minimum score of 580 or more, while a VA loan can require everything from 580 to 620 or higher. Conventional loans also often require a score of 620 or higher, while a USDA loan may require a score of 640 or higher.
See if you can get help
 
In Colorado, there are a variety of programs designed to help residents buy their first homes, including those with low incomes and bad credit. There are also programs and grants designed to assist with down payments on first-time homes. The CHFA provides many of these programs, as well as others that aren’t restricted to first-time owners. For more information, visit chfainfo.com.