Is a 700 Credit Score Good Enough to Buy a Home? – Home Buying Course Session 3

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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.

 

CLICK HERE TO GO BACK TO SESSION 2: 

How Much Home Can You ACTUALLY Afford

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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

 

In order to even get started, you need to pull your credit report for free here and also get your FREE credit score from here

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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.

 

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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

 

20% of credit reports have a meaningful error that is affecting your credit. So, make sure to go directly to the three bureaus: Transunion, Equifax & Experian.

 

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.

 

Example:

Loan Amount: $220,261

Loan Term: 30 years (360 months)

Interest Rate: 4% — Total Interest paid = $159,737

versus

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.

 

Example:

$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

  1. Pull your credit report here and review it. Dispute any errors and take care of any other items that are on there.
  2. Get your credit score here.
  3. Pay down all accounts to below 30% utilization.

 

Make sure to check out Session 4: Difference Between Pre-Qualified & Pre-Approved

Always Moving Forward,

 

||| Max

 

Max Marvelous
Writer at | Website | + posts

As a certified credit counselor and syndicated writer at MaxMyMoney, Max has coached over 250 Millennials to help take the stress out of money. When Max is not coaching, you'll find him reading financial books, indoor cycling, or visiting local pawn shops looking for swiss-made watches.