🏠 Credit Scores & Home Buying: What Every Future Homeowner Needs to Know

🔍 What Is a Credit Score?

Think of your credit score as your financial trust rating. The most common version is the FICO score, which ranges from 300 to 850. It’s based on five factors:

💡 What Hurts a Credit Score Most?

If you're not careful, these actions can drag your score down for years:

• Late or missed payments (especially 30+ days)

• High credit card balances (above 30% utilization)

• Defaults, collections, bankruptcies

• Too many hard inquiries in a short time

• Closing long-standing accounts

• Co-signing for risky borrowers

• Settling debts for less than owed

Even a single misstep — like missing a $30 utility bill — can hurt if it gets sent to collections.

📈 How to Rebuild or Boost Your Score

Improving your credit score isn’t complicated — but it takes consistency and patience:

• Pay everything on time — use autopay if needed

• Keep balances low, ideally under 10% of available credit

• Avoid new applications unless necessary

• Dispute errors on your credit report (get yours free at AnnualCreditReport.com)

• Use tools like secured cards or Experian Boost

• Become an authorized user on someone’s well-managed account

A jump of even 20 points could mean thousands saved over the life of a mortgage.

🏡 Credit Scores & Mortgage Rates: How They’re Connected

Lenders use credit tiers to determine interest rates. Here's a snapshot of how credit scores align with mortgage terms:

For example, a buyer with a 760+ score might land a 30-year mortgage at 7.18%, while someone at 620 could see 7.89% — a difference of tens of thousands over the loan’s lifetime.

🔑 What You Should Do (and Not Do)

✅ Do:

• Pay bills on time

• Keep old accounts open

• Use less than 30% of your credit

• Monitor credit reports regularly

• Diversify your credit (responsibly)

🚫 Don’t:

• Miss payments — even by a day

• Max out credit cards

• Apply for too many new accounts

• Close long-standing accounts

• Co-sign loans unless you’re willing to take on the risk

🎯 Final Thoughts: Credit Is a Long Game

A strong credit score isn’t just for the mortgage application — it’s a foundation for your entire financial future. The earlier you start managing it, the better positioned you'll be when opportunity knocks.

And when you're ready to buy, the Terebey Relocation Team is here to walk you through not just the home search — but the full financial picture that surrounds it.