What Should a First-Time Homebuyer Credit Score Look Like?

first-time homebuyer credit score

Your credit score is one of the first things a lender is going to look at when you’re buying a house, especially if you’re a first-time homebuyer. Credit scores allow banks to assess the amount of “risk” they’re taking in offering someone a loan, and as you already know, the higher your score, the better mortgage options you’ll have available to you.

However, it’s not always easy to know what a first-time homebuyer credit score should look like. It’s easy enough to find average scores, but is the average the ideal? Having questions is a natural part of purchasing a home for the first time. So, to help you assess your credit score and determine how it will affect the home buying process, we’ve put together some insights for you.

What’s a Good Credit Score for Buying a House?

There isn’t a “golden number” when it comes to a credit score for buying a house. It would be convenient, of course, to have a single number that would guarantee you the kind of house you’ve been dreaming about, but that isn’t the case. Instead, your credit score is just one (albeit significant) factor that goes into the home buying process.

In most cases, however, lenders are looking for a credit score that’s at least 640. For example, the Federal Reserve Bank of New York reported that 90% of U.S. mortgages taken out in the first quarter of 2019 were by buyers with a credit score of at least 650 while 75% had a score higher than 700.

To put this into perspective, the average credit score for buying a house is around 700. With a number like that, you’ll have access to plenty of good mortgage options, which means you can be more flexible with the kind of home you purchase.

What’s the Ideal First-Time Homebuyer Credit Score?

If you’re a first-time homebuyer, then the answer to “what's a good credit score for buying a house” is simple: as high as you can make it. This is the case for anyone who’s purchasing a home, but it’s especially helpful for first-time buyers, as a higher FICO score will show lenders that you’re a trustworthy buyer who they can offer better rates to.

And if you need some help figuring out how to improve your credit score in the time leading up to your big purchase, USA Today has some recommendations

  • Pay your bills in full and on time
  • Pay attention to your credit utilization rate, as it makes up ~30% of your score
  • Don’t oversupply yourself with new lines of credit
  • Keep old credit accounts open, even if you don’t use them, as the length of your credit history makes up ~15% of your score

If you have any questions about buying your first house or about improving your credit score, then get in touch with one of Poli Mortgage’s professional loan officers today! Not only can they help you get a free credit report done, but if your score is lower than you’d like it to be, they can offer advice on how to improve it or refer you to a credit repair company.

The First Time Homebuyers Guide