3 Credit Myths That Could Stop You From Buying Your Dream Home

Debunking 3 Common Credit Myths for Home Buyers

When it comes to credit, misinformation can cost you. At Your Hometown Lender, I’ve heard countless credit myths that could hold home buyers back from securing the best financing options. Let’s set the record straight on three of the most common misconceptions about credit:

1️⃣ Closing Old Credit Cards Boosts Your Score

Think closing old credit cards will help your credit score? Think again! While it might seem logical to reduce the number of accounts, closing old credit cards can actually hurt your credit score. Here’s why:

• It shortens your credit history, which is a key factor in determining your score.
• It could increase your credit utilization ratio, which is the amount of credit you’re using compared to your limit.

Instead, keep those older accounts open if they don’t have annual fees and maintain a low balance.

2️⃣ You Need Perfect Credit to Get a Mortgage

Do you believe you need a perfect 700+ credit score to qualify for a mortgage? The truth is, you don’t! Many home loans are designed for buyers with scores in the 600s—or even lower. Lenders consider your entire financial profile, including:

• Income stability
• Debt-to-income ratio (DTI)
• Credit history trends

There are even loan programs for buyers rebuilding their credit. So, don’t let a less-than-perfect score stop you from pursuing your dream home.

3️⃣ Checking Your Credit Hurts Your Score

Worried that checking your credit will harm your score? Checking your own credit is considered a soft inquiry, which does not impact your score. In fact, reviewing your credit report regularly is one of the smartest things you can do.

• Spot errors early and dispute them.
• Monitor your score to stay informed.
• Plan for improvements before applying for a mortgage.

Pro tip: Use free tools or credit monitoring apps to keep tabs on your credit without affecting it.

The Truth About Credit and Home Loans

Understanding how credit works empowers you to make smarter financial decisions when buying a home. At Your Hometown Lender, I’m here to guide you through the process, ensuring you have the knowledge and tools to qualify for the best home loan options.

If you’re ready to take the first step toward your dream home, contact me today for personalized advice and support. Together, we’ll make it happen! 

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