Why are credit scores so important?
Your personal credit score helps lenders assess if you’re a good risk, which translates to your ability to both secure and repay a loan. It gives lenders a window into your financial history and how you manage debt. A higher credit score may improve your chances of qualifying for a home loan and can impact the loan options, interest rates, and terms available to you.
At KB Home, our team is here to help you feel informed and prepared every step of the way. Familiarity with your credit score can help you plan your home purchase with confidence, explore financing options, and identify opportunities to strengthen your unique financial profile.
If your score isn’t where you’d like it to be, there may still be options available. Working with experienced loan professionals, like those at KBHS Home Loans® or your preferred lender, can help you better understand your situation and take the next steps toward homeownership.
Why is my credit score important when buying a home?
Your credit score helps lenders evaluate your financial history and assess your eligibility for a home loan, as well as the terms and interest rates you may receive.
How does my credit score affect my loan options?
The higher your credit score, the lower your interest rate. And vice versa — the lower your credit score, the higher your interest rate will probably be. So when it comes to getting a more favorable loan, the higher, the better.
It’s important to keep in mind that lenders will take a very close look at your payment history, amount of debt you have incurred, span of credit history, any new credit or credit inquiries, and the type of credit cards you have.
Can I still buy a home if my credit score isn’t perfect?
Yes. Even if your credit score isn’t where you’d like it to be, there may still be financing options available depending on your overall financial profile. There are many different loan programs available to accommodate a borrower’s FICO scores. So, with that in mind, it’s certainly possible to qualify for a loan if your credit is around 600 and above.
What is good advice for a first-time homebuyer?
According to mortgage loan experts, if you’re gearing up to buy your first home, be sure to get all your financial ducks in a row. That means pay all of your bills on time and don’t overextend with additional debt immediately before or during the home purchase process. The lender wants to see that you have ample room to handle your monthly payment.
Of course it’s only natural to start thinking about furniture and other big-ticket items for your new home, but it’s best to be prudent and wait until you have closed escrow. Making large purchases with a credit card, such as furnishings (or a new car) can adversely impact your credit score.
Remember, lenders will be keeping an eye on your credit throughout the entire loan process until the very end, so be patient — your brand-new home is worth all the effort!
Who can help me understand my credit and options?
Loan professionals, including those at KBHS Home Loans or your chosen lender, can help you review your credit and guide you through your financing options.
How can I improve my credit score?
Common steps include paying bills on time, reducing outstanding debt, and avoiding opening new credit accounts.
KBHS Home Loans, LLC NMLS 1542802 For licensing information visit nmlsconsumeraccess.org. Headquarters: 300 East Royal Lane, Suite 250, Irving, TX 75039. 855-378-6625. Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply. Equal Housing Lender. AZ: KBHS – 4949 Pioneer Ln, Lakeside, AZ 85929 – Mortgage Banker License #0939988; CA: Licensed by the Department of Financial Protection and Innovation Under the California Residential Mortgage Lending Act #41DBO-67718. California Financing Law License #60DBO-67717; CO: Regulated by the Colorado Division of Real Estate; WA: Washington Consumer Loan Company License #CL-1542802.
KB Home and KBHS share common ownership and because of this relationship may receive a financial or other benefit. You are not required to use KBHS as a condition of purchase or sale of any real estate.
