What is a good credit score to buy a house?

Article summary

• A good credit record is essential to getting a home loan approved.
• You’ll want to score around 781 or above.
• Ways to secure a good credit score include paying your loans on time, and using less than 30% of your credit limit.

Homeownership is the dream, but you may be worried about your chances of having your home loan approved. How can you assess your chances?

The factor that requires the most attention is your credit score, a three digit number between 0 and 999 that is based on your financial history.

The bank will look primarily at your credit score when determining whether to grant your home loan.

What is a good credit score to buy a house?

781 or above is deemed an excellent credit score. You’ll want to score around this number to have a good chance of home loan approval.

What is a bad credit score?

Below 610 puts you in a precarious position. If your credit score falls into this bracket, you’ll want to look at ways to improve your credit score.

Credit score in more detail:

• 781 to 850. Excellent.
• 661 to 780. Good.
• 610 to 660. Fair.
• 500 to 610. Poor.
• 300 to 499. Very poor.

How can I find out my credit score?

• You can use ooba Home Loans’ Bond Indicator to access your credit score. This is a 100% secure, online tool that is available free of charge and without any obligations.
• Based on the information you provide, the tool will give you an indication of your credit rating, and how much you can realistically afford.
• The Bond Indicator tool will issue you with a Bond Indicator Certificate that will enable you to house hunt with confidence.

How can I get a good credit score?

• Pay your loans on time. Especially credit card debt, as they carry the highest interest rates.
• You need to have accounts. This may seem counter-intuitive as it creates more debt, but without accounts the credit bureaus can’t assess your application. So open accounts, but pay them in full and on time.
• Don’t use more than 30% of your credit limit.
• Fact-check your credit report. Use the methods we list above to check your credit record, and look for errors. Dispute any suspected errors. How to lodge a credit dispute: Call the TransUnion call centre on 0861 886 466 to lodge your dispute; or you can log your dispute online at www.transunion.co.za. The dispute must be lodged within three months of the credit report.