Buying your first home is an exciting milestone, but it’s natural to feel a bit daunted too. One question many first-time buyers have is “What credit score will I need?” The good news is that while lenders do look at your credit report, there’s no single “pass or fail” score. Every applicant’s situation is evaluated holistically.
That said, a higher credit score can increase your chances of mortgage approval and give you access to better interest rates. As a general guide, scores over 700 are considered good, while scores over 800 are excellent. But even scores in the 600s may be approved in some circumstances.
The key is to demonstrate you’re a responsible borrower who can manage debt sensibly. Lenders want to see a track record of making payments on time for things like credit cards, loans and phone/utility bills. They’ll also look at how much debt you currently have versus your income.
If your score isn’t where you’d like it to be, don’t lose heart! There are steps you can take to improve it, such as getting a credit-builder loan or becoming an authorised user on someone else’s long-standing account. Be patient, remain focused on your goal and speak to an adviser who can guide you through the process. With discipline and preparation, that dream of homeownership can become a reality.