Your Credit Score Doesn't Have to Be Perfect
I can't tell you how many times someone has told me, "I'll call you when my credit is better." And I get it — there's a lot of misinformation out there about what kind of credit score you need to buy a home. Let me set the record straight on the five myths I hear most often.
Myth #1: You Need a 750+ Credit Score to Get a Mortgage
The reality: FHA loans require a minimum of 580 with 3.5% down. Conventional loans start at 620. VA loans technically have no minimum score, though most lenders set a floor around 580-620.
Is a higher score better? Of course — it gets you lower rates. But a 640 score doesn't disqualify you. It just means we need to find the right program, and that's exactly what I do.
Myth #2: Checking Your Credit Score Hurts It
The reality: Checking your own score is a "soft inquiry" and has zero impact. When you apply for a mortgage, that's a "hard inquiry" — and yes, it can ding your score by a few points temporarily. But here's the key: all mortgage inquiries within a 45-day window count as a single inquiry. So shopping around for rates doesn't hurt you.
In fact, you should be shopping around. That's the whole point of working with a broker — I do the shopping for you across 160+ lenders with a single credit pull.
Myth #3: Paying Off All Your Debt Before Applying Is Always Smart
The reality: This one trips people up. Paying off debt is generally good, but timing matters. If you drain your savings to pay off a credit card the month before applying, you might look great on paper debt-wise — but now you don't have enough money for your down payment and closing costs.
There's also a nuance with credit utilization. Paying a card down to $0 and closing the account can actually lower your score because it reduces your available credit. The better strategy? Pay down balances to below 30% of the limit and keep the accounts open.
Before you make any major financial moves, talk to me first. A 15-minute conversation could save you months of credit recovery.
Myth #4: You Should Never Open New Credit Before Buying
The reality: Generally true during the mortgage process — once you're under contract, don't open anything new. But months before applying? A well-managed new account can actually help your score by improving your credit mix and lowering your utilization ratio.
The key word is "months." A new account opened six months before your mortgage application is fine. One opened two weeks before is a red flag. Timing is everything.
Myth #5: A Past Bankruptcy or Foreclosure Means You Can Never Buy
The reality: Life happens. Bankruptcies, foreclosures, short sales — I've helped people recover from all of them. Here are the standard waiting periods:
- Chapter 7 Bankruptcy: 2 years for FHA, 4 years for conventional
- Chapter 13 Bankruptcy: 1 year into repayment for FHA (with court approval), 2 years after discharge for conventional
- Foreclosure: 3 years for FHA, 7 years for conventional
- Short sale: 3 years for FHA, 4 years for conventional
And those are worst-case timelines. With extenuating circumstances documented, some of those periods can be shortened. The point is: a credit event in your past doesn't mean you're locked out of homeownership forever.
What Actually Moves the Needle
If you want to improve your credit score before buying, here's where to focus:
- Pay on time, every time. Payment history is 35% of your score. Even one 30-day late payment can drop you significantly.
- Get utilization under 30%. If your credit card limit is $10,000, keep the balance below $3,000. Under 10% is even better.
- Don't close old accounts. The length of your credit history matters. That old card you never use? Keep it open.
- Dispute errors. Pull your reports from annualcreditreport.com and look for anything incorrect. Mistakes are more common than you'd think.
Don't Wait for "Perfect"
Here's what I always tell people: perfect is the enemy of progress. If you're waiting for an 800 score before you even explore your options, you could be leaving years of equity building on the table. Let me look at where you are today and show you what's realistic.
Schedule a free credit review call — I'll pull your numbers, give you honest feedback, and lay out a game plan. Whether that plan is "let's go now" or "let's get you ready in 90 days," you'll leave the conversation with a clear path forward.
