Your credit score is a big factor in getting a mortgage and can affect how much it costs (hint: good credit usually means a better mortgage rate).
Lenders also take a look at your debt compared to your monthly income (called debt ratios) to see if you can handle mortgage payments. The better your ratios, the more you might be able to borrow—depending on other factors, of course.
DO
- Pay any late payments and resolve collections or judgements
- Ensure you’re making at least the minimum payment on all accounts — on time
- Try to stay within 60% of your limit on revolving accounts (such as credit cards)
DON'T
- Make late payments or miss payments
- Close accounts without checking with your mortgage broker as it may impact your credit score
- Wait too long to ask your broker for advice — the earlier the better to get in debt shape!
680–900
What’s considered a ‘good’ credit score? Scores range from 300 to 900. A score between 680 and 900 is considered good, very good, or excellent.