Many people who want to buy a home in the Triangle area are not sitting on the sidelines by choice. They are holding back because they believe they are not qualified. And for a lot of would-be buyers, concerns about their credit score are the biggest reason why.
A Bankrate survey found that 2 out of every 5 Americans, about 42%, think you need excellent credit to qualify for a mortgage. That belief shows up again when renters are asked why they have not bought yet, since “my credit isn’t good enough” is one of the most common answers.
You might feel the same way. You check your credit score, notice it is not where you want it to be, and assume buying your first home is simply not realistic right now.
But there is more to the story.
Despite what many people assume, having perfect credit is not a requirement to buy a home.
You Don’t Need Perfect Credit To Buy a Home
So where does this misconception come from? A lot of it comes from looking at today’s typical buyer. According to the New York Federal Reserve, the median credit score for all homebuyers is 775.
That number can feel intimidating. But it does not mean lenders require a score that high.
When you look closer at recent buyers, many were approved with lower scores. Data shows that 10% of buyers had credit scores around 660. Some were above that, and some were below it, but the median for that lowest 10th percentile landed in that range (see graph below).
That means a lower score does not automatically shut the door on homeownership. FICO explains it this way:
While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single ‘cutoff score’ used by all lenders, and there are many additional factors that lenders may use . . .”
That is why talking with Linda Craft Team Realtors matters. Some Triangle area buyers are qualifying with scores in the 600s, and learning what is possible could change how you view your options.
Bottom Line
Your credit score matters, but it does not need to be flawless.
If concerns about credit have been keeping you from buying a home in the Triangle area, it may be worth taking another look. A conversation with Linda Craft Team Realtors can help you understand where you stand and what steps could move you closer to buying. You do not need to have everything figured out before reaching out.