What is a Good Credit Score for a First-Time Homebuyer?

What is a good credit score to buy a home? Ranging between 650 and 850 is optimum, but it is possible to secure a good deal with a score below 620.

Scott Castillo

17 May 2022

As a first-time home buyer preparing to take out your first home loan, one of the most important questions you should be asking is, “what is a good credit score to secure my mortgage?”

Learning about how your credit score may impact your eligibility for preferable loan terms — such as a reduced interest rate, waived fees, and omitting Private Mortgage Insurance requirements — can help you get ready to apply for your mortgage.

Here is a full guide for first-time buyers reviewing:

What is a good credit score?
Loan options for home buyers with a low credit score
Tips for building and maintaining your credit score

What is a Good Credit Score?

When a lender is reviewing your credit history and credit score, they will be looking at your FICO® score. 90% of top lenders use the FICO® score to determine borrowing eligibility and terms.

A FICO® score is calculated by:

30% — Amounts Owed
35% — Payment History
10% — New Credit
15% — Length of Credit History
10% — Credit Mix

FICO scores range between 300 at the low end and 850 as the highest score. In most cases, mortgage lenders consider a score above 650 to be good, while borrowers with a score below 620 are considered as being higher risk.

As a first-time home buyer, a good credit score to secure your mortgage would be anything in the 650 to 850 range. A high FICO score is best suited to give you access to advantageous loan terms that can help make your mortgage more affordable over time.

Can You Still Secure a Mortgage With Weak Credit?

While a strong credit score is ideal for buying a home, it’s possible to secure a mortgage with good terms even with weak credit history.

There are many loan options available for eligible buyers with low credit scores, including government affordability programs, state and local homebuyer assistance programs, and military assistance.

Explore more helpful resources on the topic, such as:

3 Tips for Building and Maintaining Your Credit Score

Now that you know what is a good credit score for buying your first home, here are some tips to help you build and maintain your credit score to potentially improve your borrowing eligibility when it’s time to apply for your mortgage.

#1. Avoid making large purchases on credit when approaching your mortgage.

You want your credit score to be as stable as possible when you’re applying for a mortgage, but also while you’re in the process of pre-approval and loan underwriting. A sudden change to your score can alter your loan eligibility, which would require your lender to update and adjust your mortgage.

To avoid any discrepancies in your home buying process, try not to make large purchases on your credit lines before and throughout the mortgage process. If you do need to make a large purchase, it’s a good idea to use cash or one of your credit lines with a low balance, if necessary.

#2. Pay off long-standing debts first.

If you are trying to improve your credit score before applying for your mortgage, reducing your debts can help you improve two of the most important areas of your credit history: amounts owed and payment history.

To make the biggest impact on your credit score, focus on your oldest debts first. Long-standing debts and credit lines with usage over 30% should take priority over newer balances and credit lines with low usage.

#3. Make all bill payments on time.

Be sure to pay all of your bills on time to help strengthen your credit score. Being even a few days late can negatively impact your score, so opting for autopay programs or making early payments are great credit-building strategies for first-time buyers.

Partner with a Top Agent to Get the Guidance You Need

If you have more questions like “what is a good credit score?” or “how should I be preparing for the purchase of my first home?,” working with a top agent in your area can help you get the answers you need.

When you choose to work with a leading real estate agent in your area, you will have a trusted resource to guide you and help you make informed decisions. Having an experienced professional at your side can help streamline your home buying transaction and ensure you’re leveraging a market-beating strategy to find, bid on, and purchase your first home.

The easiest and fastest way to find the perfect agent for you is with RealEstateAgents.com.

By reviewing the latest market data from recent home sales, RealEstateAgents.com ranks the agents in your community — making it simple to compare agents and find the best fit for you.