A Good Credit Score Can Get You an Affordable Home

You probably already know how important it is to have a good credit score. A high score can help you qualify for loans with the lowest interest rates, nab auto insurance at the lowest premiums, and even beat out your competitors for that dream job.

However, having a good credit score is even more important today. That’s because homes across the country are at their most affordable levels in decades, but you won’t be able to qualify for a mortgage loan for one of these bargain-priced residences if you don’t learn how to keep good credit.

The most recent Housing Opportunity Index, a measure of the affordability of homes across the country, reported that 72.1 percent of residences in the third quarter of this year were affordable to households earning the national median income.

This means that households earning $64,400 a year could afford the vast majority of U.S. homes.

This is a big change from the days of the housing boom, a boom that came to a slow end in late 2006. Back then, economists were worried that rising home values would price all but the wealthiest members of society out of the opportunity of owning a home.

These concerns have lessened as housing values continue to fall. This comes with its own negatives, of course; falling home values have made it more difficult for homeowners to sell their homes without losing a sizable chunk of the money they initially invested in their residences.

You know how important a top credit score is; you just need to know how to get a good credit score. Fortunately, this is simple. You just need to pay all your bills on time every month, and you need to cut down on your credit card debt. Finally, close any credit card accounts you don’t absolutely need.

These three steps will send your credit scores on a steady upward trend. Don’t expect to nab a top score overnight, though. Repairing bad credit takes time, months at the least. You might have to wait to buy a home for a year or more depending upon how low your credit scores are.

Common wisdom once considered 700 a good credit score. That’s changed too. Today, conventional mortgage lenders are more frequently reserving their best interest rates for borrowers with FICO credit scores of 750 or higher. If you want to nab these top rates, aim for such a score. Getting a good credit score takes patience and commitment. However, the rewards make the hard work worth it.