It's no secret that your credit is a huge factor in buying a home in Berks Count, or anywhere. It's a fact of life, and for good reason.

Lenders need to know how much they can trust you to make payments for the next few decades, and that is determined by your credit score.

Your credit score can save or cost you thousands of dollars when buying a home.

How much can this score impact you and what are the details behind this score?

How Your Score is Calculated

Your FICO credit score is comprised of five elements.

  1. How you pay your bills makes up 35% of this score. Paying on time adds points. Late payments take points away. Since this makes up a large portion of your score, make sure you pay bills on time.
  2. 30% of your score is based on your credit utilization ratio. This means how much you owe as part of the amount of credit you have available. The lower this ratio, the better.
  3. 15% is based on the length of your credit history. When did you open your first account (and is it still open)?
  4. 10% of your score goes to the type of credit you have such as credit cards or car loans and mortgages.
  5. The last 10% is impacted by new credit applications. How often and for what types of credit are you applying?

Where to Find Your Score and Report

There are many websites that offer credit scores, but the best ones that offer them for free are or

Make sure you check those reports for fraud or bad information. Contact both credit reporting agencies and the company reporting inaccurate information if you find anything incorrect.

How Your Score Can Cost You

Credit scores range from 300 to 850. There can be varying determinations of what is considered good or excellent credit. Generally you want a score higher than 720 to be considered "excellent."

The higher your credit score, the more creditworthy you appear to lenders, which translates into lower interest rates and more money saved when taking out a loan.

Having a solid credit score is one of the most financially savvy tools for you to have on hand when it comes to buying a home. When managed wisely, your credit score will bring you confidence, peace of mind, and more money saved via low interest rates.

When mismanaged or not cared for at all, your credit score can delay your success in meeting financial goals and result in additional funds and resources spent correcting past mistakes.

Need help finding your perfect home in Berks County? Our powerful home search tool will help you find the home of your dreams. Make to visit to our blog every week for more real estate advice, along with local Berks County articles.