First-time Homebuyer 101: Credit

First-time Homebuyer 101: Credit

Your credit will never be more helpful (or harmful) than when you buy your first home.

Your credit score is used by mortgage lenders to:

  • Determine if you qualify for a loan
  • Set the interest rate (or price) for your mortgage
💡 A higher credit score is always better – a 20-point increase can save $10,000+ in interest over the life of a loan and expand your budget.

What is a “good” score? 

  • 🙂 580 is typically the minimum requirement
  • 😃 620 is a good target to increase your options
  • 🤩 700 is your stretch goal to maximize buying power

Which credit score do mortgage lenders use? A combination of FICO 2, 4, and 5 (a lender will pull all three and take the middle score). VantageScore and/or FICO 8, which are more common, are not used by mortgage lenders. 

👉 Avoid surprises when you apply for a mortgage by tracking the right score.

How do I build my mortgage credit score?

  • Pay your bills on time, every time
  • Pay off anything in collections or past due
  • Do not carry a balance on your credit cards
  • Ask for credit limit increases on current cards
  • Find and fix credit report errors
  • Do not close old accounts (even if you don’t use them)
  • Get added as an authorized user to someone else's healthy credit account

How do I find out my mortgage credit score? Let us help! Gravy is one of the only places you can track your FICO 4 score without impacting your credit. You can also get real-time credit alerts, use mortgage credit score simulators, and see detailed information about your mortgage credit profile. 

Get started right from the Gravy app! Start a free Gravy+ trial to see your score right now.

❤️ Gravy also partners with a select group of credit-builder companies that have a track record of success helping first-time homebuyers. Check them out in the app!

Check out our other first-time homebuyer guides:

Will Dunn
Will Dunn
Gravy Co-Founder and Chief Growth Officer
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