September 9th, 2011
Credit Karma Answers: How do I build credit to buy a house?
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Ready to take the plunge into becoming a homeowner? Make sure your credit is in tip-top shape first! Check out these tips, from our Credit Advisor, Justine Rivero.
You’re going to need great credit if you want to get approval from a lender, as well as the best interest rates possible.
But if you’re worried that your credit may not be in tip-top shape, we have a couple of steps to help you build it back up.
Step 1: Check your Credit Score.
By checking your credit score, you’ll have a baseline and will know how much you have to improve in order to get the best rates possible. You need at least a 660 score just to get approved by a lender. However, if you want to get the best interest rates and save the most money, you’ll need at 720+.
Step 2: Improve Areas of Your Credit Report Card.
Now that you know your credit score, it’s time to figure out what areas of your credit report card you can improve so you can improve your credit health. Your Credit Report Card is kind of like a snapshot of your credit report. It boils down your credit health to a few key components. That way, you can take a look at it, see what grade you got, and know where you need to improve.
Step 3: Credit is Important, But Don’t Over Stress. Breathe!
Phew. Ok, on to step 4!
Step 4: Remember That Your Daily Credit Actions Affect Your Credit Score.
Now that you know what areas you need to improve on, now’s the time (before you buy your house) to take the next couple of months to build up your credit score. Whether that’s by paying down your debts or using your credit cards better, remember that everyday, your credit actions affect your credit score.
Step 5: Be Patient and Remain Proactive. It Takes Time to Build Excellent Credit!
It’ll take a couple of months, even a few years to build up your credit score, but we promise it’ll be worth it in the end. If you want to save thousands of dollars on your mortgage, building up your credit score is the way to go.
So track your credit score and your progress with Credit Karma and watch your credit health improve!
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Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.