Jeni VanOrnum | Real Estate Insights & Education

Your credit score significantly affects mortgage approval, interest rates, and long-term costs. Here’s what first-time buyers need to know.

Credit Score Ranges

• 800+: Exceptional
• 740-799: Very Good
• 670-739: Good
• 580-669: Fair
• Below 580: Poor

Minimum Scores by Loan Type

• Conventional: 620+ (some lenders require 640+)
• FHA: 500+ (580+ for 3.5% down)
• VA: No minimum (lenders typically want 620+)
• USDA: 640+

How Your Score Affects Interest Rates

On a $300,000 30-year mortgage:

• 760+ score: 6.5% rate = $1,896/month
• 680-699 score: 7.0% rate = $1,996/month
• 620-639 score: 7.5% rate = $2,098/month

That’s $202/month or $72,720 over 30 years between excellent and fair credit!

What Affects Your Credit Score?

• Payment history (35%)
• Credit utilization (30%)
• Length of credit history (15%)
• Credit mix (10%)
• New credit inquiries (10%)

Improving Your Score Before Applying

Do:

• Pay all bills on time
• Reduce credit card balances below 30% of limits
• Keep old credit accounts open
• Check credit reports for errors
• Pay down debt strategically

Don’t:

• Close old credit cards
• Apply for new credit
• Make large purchases on credit
• Co-sign for anyone
• Let accounts go to collections

Timeline for Improvement

• Paying off collections: Immediate to 30 days
• Reducing utilization: 1-2 billing cycles
• Building payment history: 3-6 months
• Recovering from late payments: 6-24 months

When to Check Your Credit

Check at least 3-6 months before applying for a mortgage. This gives time to address issues.

Free Credit Reports

Get free annual reports from all three bureaus at AnnualCreditReport.com.

Dispute Errors

Found mistakes? File disputes with all three credit bureaus (Equifax, Experian, TransUnion). They must investigate within 30 days.

Let’s Discuss Your Situation

Whatever your credit situation, we’ll find a path to homeownership. I work with lenders who specialize in various credit profiles.