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Keith Kennedy | Access USA Realty LLC
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    Why Your Credit Score Is Crucial When Buying a Home

    Why Your Credit Score Is Crucial When Buying a Home

    Published 10/02/2025 | Posted by Keith Kennedy

    Whether you're a first-time homebuyer or preparing for your next move, your credit score plays a major role in the homebuying process. It can affect everything from the interest rate on your mortgage to the type of loan you qualify for — and even whether you’re approved at all.

    Here’s why your credit score matters, how it impacts your home purchase, and what you can do to improve it.

    What Is a Credit Score?

    Your credit score is a three-digit number (typically ranging from 300 to 850) that reflects how responsibly you manage debt. It’s based on your credit history, including:

    • Payment history (on-time vs. late payments)
    • Credit utilization (how much debt you’re using vs. available)
    • Length of credit history
    • Types of credit accounts
    • Recent credit inquiries
    • Mortgage lenders use this score to evaluate risk — essentially, how likely you are to repay the loan.

    Why Credit Score Matters When Buying a Home

    Loan Approval

    Most mortgage lenders have minimum credit score requirements. If your score is too low, you may not qualify at all — or only for certain types of loans (such as FHA).

    Interest Rates

    Your credit score directly affects the interest rate you're offered. A higher score usually means lower rates, which can save you tens of thousands of dollars over the life of your loan.

    Credit ScoreEstimated Mortgage Rate Impact760+Best rates available700–759Very good rates660–699Average to good rates620–659Higher interest rates<620May require special loan programs

    Loan Options

    Certain loan programs (like conventional, FHA, VA, or USDA) have different credit requirements. A higher score can give you more flexibility to choose the best fit for your financial goals.

    Private Mortgage Insurance (PMI) Costs

    If you’re putting down less than 20%, you’ll likely pay PMI. A higher credit score can reduce your PMI rate, which lowers your monthly payment.

    How to Improve Your Credit Score Before Buying

    If your score isn’t quite where you want it, don’t worry — there are ways to improve it over time:

    • Pay all bills on time
    • Reduce credit card balances
    • Avoid opening new credit accounts before applying for a mortgage
    • Review your credit report for errors (you can dispute them)
    • Keep old credit accounts open to build history

    Even a small bump in your score can increase your buying power and lower your monthly costs.

    Final Thoughts: Credit Is Key to Homeownership

    Your credit score isn’t the only factor lenders consider, but it’s one of the most influential. Knowing where you stand — and taking steps to improve — can make a huge difference in your homebuying journey.

    At The Keith Kennedy Group, we guide buyers through every step of the process, including preparing financially for a successful purchase. Need help understanding where you stand? We’re here to connect you with trusted lenders and credit resources.

    Ready to buy but unsure about your credit? Let’s start with a conversation — and get you one step closer to your dream home.

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