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Check Your Credit Reports & Scores

This is another critical step when buying a house, and it's something you should start doing today. Your credit score can make or break your chances of getting a mortgage loan.

In the past, lenders didn't put too much emphasis on credit scores. If you made enough money, you could qualify for a loan. And then came the housing crash of 2008. Today, lenders are doing everything they can to reduce their risks. One of the ways they do this is by scrutinizing the borrower's credit score.

In this context, I'm talking about your FICO credit score in particular. This is the one used by most mortgage lenders. So it's the only one you should be concerned with at this point. Your FICO score is computed based on the information within your credit reports. So you want to review both of these things.

When reviewing your credit reports, you're primarily concerned with accuracy. Make sure there aren't any errors or inaccuracies. If there are, dispute them ASAP (here's how). You can get copies of your reports for free by visiting


You should also check your FICO credit scores to see where you stand. The scoring range goes from 300 to 850. Higher is better. You'll probably need a score of at least 640 to qualify for a mortgage loan. You might be able to qualify for an FHA loan with a score below that. You can purchase your scores through

Many first-time buyers skip this step entirely when buying a house. "Why do I need to check my credit?" they say. "The lender will do this for me." True. But the lender is not your financial advisor. They are selling something, and you're buying it. You are on opposite sides of a business relationship. The last thing you want is for the lender to know more about your qualifications than you do (such as your credit score). You can't negotiate from a position of ignorance.

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