At Josey Young & Bradley, our real estate agents want to give all our clients the best opportunity to find a home they'll be happy with. In a time of increased buuyer activity and historic low interest rates, more people are finding now is the right time for them to explore Atlanta homes for sale.

Many people wonder, however, if their credit is "good enough" for a mortgage loan.

Your credit history serves as a measure of the risk lenders take if they decide to provide you with a mortgage loan. Your history of paying debts on time is the principal factor that determines credit, although other factors – like how much credit you have total – are also counted.

While it's generally true that good credit leads to a more favorable mortgage loan package, it's not true that you need "perfect credit" to get the funding you want. Every effort you make to raise your credit score before you apply for a home loan is worth it!

If you're concerned about your credit score, it's best to get started a few months before you apply for your loan. As soon as you know you're looking for a home, start on the month-to-month tasks that can help your credit.

Here's what you can do:

1. Review Your Credit Report
   Every American is entitled to one free credit report each year. This report consolidates information from all the largest credit reporting bureaus. Errors on your credit report can cause significant damage. You might even find credit accounts you didn't open! Dispute any errors and they may be removed.
   
   
2. Pay Off Collection Accounts
   If you have any accounts that have gone into collections, pay them off first. These "delinquent accounts" incur harsh penalties compared to missing a payment by just a few days. Start with accounts that are 90 days or more overdue, then 60 days. Be sure you get written evidence you have paid off collections.
   
   
3. Keep Other Accounts Current
   Keep all your credit accounts and other obligations current to minimize issues. When all accounts are current, it is usually best to focus on paying off the card or cards with the highest APR, then go to the next highest. Don't worry: No one expects you to pay off your student loans before buying a house!
   
   
4. Avoid Any New Accounts
   In addition to avoiding any new credit cards, be careful not to take on any other loan obligations. For example, put off buying a new car until after closing day! New accounts throw off your credit score calculations and can tip you toward less favorable interest rates.
   
   
5. Don't Close Existing Accounts
   Even if you completely pay off a credit card, don't close your existing accounts! The age of accounts and the total amount of credit available to you are both factors that play in your favor. Simply remember to make a small purchase and pay it off every now and then so your card is not shut down.
   
   
6. Look for Opportunities Especially for First-Time Buyers
   There are several home loan programs especially for first-time homebuyers. Depending on your area, you may qualify for an FHA loan, USDA Rural Development loan, or many others. The government sets standards for these loans to make them accessible, but you still get them from a lender.

Even if you have had credit issues in the past, it does not mean you can't get the home you want. Your credit score is only one factor a lender will consider. Your current income and recent payment history can be much more important. Contact us today to learn more.