When buying a home, a lender will run your credit score to start the process of getting pre-qualified. What you should KNOW is that your credit score will dictate how much of a loan the lender will give you.

While this might sound scary to you, it is going to give you piece of mind should they find anything you may need to correct or perhaps even something you were unaware of. We HIGHLY recommend getting pre-qualified as many sellers will not even entertain an offer unless your financing is in order. 

If you have a credit score in the 600s, a lender will have a much different value of how much home you can afford vs. if you have a credit score in the 800s. 

1. Payment History
35% depends on bills paid on time. Note: Auto-pay is a total game changer -- if you are forgetful paying bills on time, consider setting up auto-pay. 

2. Amount on Credit Balance
30% is based on how much outstanding debt you have. Pay off those credit card bills in full every month! 

3. Credit History
15% is determined by longevity of your established credit. If you use a debit card for your purchases, it would be recommended to convert to using a credit card if you're looking to buy a house in the next year or two years. Most lenders will want to see 2 solid years of good credit history. 

4. New Credit
10% is based on how many inquiries you have had on your credit report. It would be not be advised to have a car dealership, a lender or any other third party run your credit score multiple times in a year. 

If you have any questions about credit score, local lenders, or the home buying process, call/email/text me Marisa Owen. 

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Marisa Owen - Realtor
Cell: 925-785-2596
Email: Marisa@BuyBozemanHomes.com 

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