Before you start touring homes in Marietta, Kennesaw, or anywhere in the Atlanta metro, there's one number that will shape your entire home buying experience more than any other: your credit score. Here's what you need to know — and what you can do about it.
Why Your Credit Score Matters So Much
Your credit score directly determines the interest rate you'll be offered. On a $350,000 mortgage, the difference between a 680 score and a 740 score can mean a rate difference of 0.5–0.75%, which translates to $100–$150 more per month — or $36,000–$54,000 over a 30-year loan.
The Score Tiers That Matter for Mortgages
- 760+ — Best available rates across all loan types
- 740–759 — Excellent rates, minimal pricing adjustments
- 720–739 — Good rates with minor adjustments
- 700–719 — Moderate adjustments begin
- 680–699 — Noticeable rate increases
- 640–679 — Higher rates; FHA may be more cost-effective
- 580–639 — FHA minimum; limited conventional options
The Fastest Ways to Raise Your Score
1. Pay down credit card balances. Credit utilization — the percentage of your available credit you're using — accounts for 30% of your score. Getting each card below 30% utilization (and ideally below 10%) can raise your score 20–50 points within 30–60 days.
2. Don't close old accounts. The length of your credit history matters. Closing an old card actually hurts your score by reducing your available credit and shortening your average account age.
3. Dispute errors on your credit report. Studies suggest that 1 in 5 credit reports contain errors. Pull your free reports at AnnualCreditReport.com and dispute any inaccuracies with the bureaus.
4. Avoid new credit applications. Each hard inquiry drops your score by 3–5 points. In the 6 months before applying for a mortgage, avoid applying for new credit cards, auto loans, or other financing.
5. Become an authorized user. If a family member has a long-standing credit card with low utilization and perfect payment history, being added as an authorized user can boost your score significantly.
The 90-Day Credit Improvement Plan
In our experience, most buyers can improve their score by 30–60 points within 90 days by focusing on utilization and dispute resolution. If you're 6–12 months from buying, even more dramatic improvements are possible. We offer free credit consultations to help you build a specific action plan for your situation.