To answer the question quite simply. YES! You can most definitely buy a home with a 700 credit score.
Now, with that being said, having a 700 credit score does not mean you will be offered the BEST interest rates.
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In this post, you’ll see how a small difference in credit score can make a meaningful difference in saving money and I’m sure you want to save money!
FIRSTLY: GET YOU CREDIT REPORT & SCORE
Let’s say you’re looking at a news article. The headline is great and tells you the most important facts but does not provide any detail. The body of the news story gives all the pertaining details that matter.
The headline is great. But only provides so much.
Similarly, the credit score provides a snapshot of the full picture. The credit report provides ALL your accounts and history. This is super important in the home buying process and simply being a proactive financial individual.
SECONDLY: CLEAN UP & DISPUTE ANY CORRECT ITEMS
Make sure to submit disputes through each bureau.
BUT IS 700 STILL GOOD ENOUGH?
Yes. And you can even buy a home with a credit score as little as 620 but I wouldn’t advise this because the interest rate can be quite different. Let’s look at an example of having a 4% interest rate compared to a 5% interest rate.
Loan Amount: $220,261
Loan Term: 30 years (360 months)
Interest Rate: 4% — Total Interest paid = $159,737
Interest Rate: 5% — Total interest paid = $207,271
A difference of nearly $48,000. That’s nearly 50 grand you save when you have a better interest rate of 1%.
Application: Get your credit score as high as possible before shopping for mortgages.
CREDIT UTILIZATION: PAY TO LOWER BELOW 3%
A priority in order to pay down all your credit accounts to under 30% utilization.
$10,000 credit limit
30% of 10k = $3000
Pay down this credit card to below $3000. This will help your credit score in perhaps a significant way.
SESSION 3 ACTION STEPS
- Pull your credit report here and review it. Dispute any errors and take care of any other items that are on there.
- Get your credit score here.
- Pay down all accounts to below 30% utilization.
Always Moving Forward,