FIRST TIME HOME BUYERS SERIES | WEEK SIX | CREDIT

Embarking on the journey to homeownership is an exciting chapter, but it comes with a set of financial considerations, with credit being a key player in the process. As a first-time homebuyer, understanding the importance of credit is vital for a smooth and successful experience.

Credit scores typically range from 300 to 900, with higher scores reflecting greater creditworthiness. The higher the score, the more favorable your financial profile appears to lenders. Several factors contribute to these scores, including payment history, credit utilization, length of credit history and types of credit in use.

For first-time home buyers, your past credit usage holds substantial importance. Responsible use of credit is paramount, with timely payments and careful credit management contributing to a positive credit history. It's essential to check your credit report to ensure its accuracy. You can obtain free reports from platforms like Borrowell.

Paying bills on time, including seemingly minor ones like your cell phone bill, and maintaining credit card utilization within a healthy range (30-50% of the limit) are crucial practices to keep your credit score in good shape. 

Week 2 homework was to get a free copy of your credit report. If you haven’t done so already, that is a great place to start.

Getting and keeping a positive credit score not only enhances your financial standing but also opens the door to realizing your dream of owning your first home. Please reach out if you’d like insights and guidance on navigating the crucial relationship between your credit score and the homebuying process.

I'll be back next week where we’ll discuss banks vs mortgage brokers.