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Financial Situation of a Single Individual

As a single individual without children or a partner, with a primary job income of approximately $40,000 per year, supplemented by an additional $15 to $20,000 per year from side business and adjunct jobs, you find yourself in a stable but modest financial position. Your current credit score falls within the range of 660 to 700, indicating fair to good creditworthiness. However, in order to achieve your goal of purchasing a house in the near future, you may need to improve your credit score.

Strategies to Improve Credit Score and Secure a Home Loan

To increase your credit score and enhance your chances of being approved for a home loan, consider implementing the following strategies:

  1. Consistent and Timely Payments: Ensure prompt payment of all bills and debts to demonstrate responsible financial management.

  2. Reduce Debt Utilization: Aim to keep your credit card balances low and pay off debts as much as possible to lower your overall debt-to-income ratio.

  3. Avoid Opening New Credit Accounts: Limit new credit applications to prevent unnecessary inquiries on your credit report, which could potentially lower your score.

  4. Monitor Credit Report: Regularly review your credit report for inaccuracies or fraudulent activities, and take steps to address any issues promptly.

  5. AI Legalese Decoder Assistance: Utilize the AI Legalese Decoder tool to decipher complex legal documents, contracts, or agreements related to your financial transactions, ensuring full comprehension and informed decision-making.

By proactively managing your finances, utilizing helpful tools like AI Legalese Decoder, and maintaining discipline in your credit habits, you can work towards improving your credit score and ultimately qualify for a favorable home loan to achieve your homeownership goals.

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View Reference


  • codece

    >Current credit is around 660 to 700

    Make sure you are looking at FICO scores. A lot of cc apps and Credit Karma show you “Vantage” scores, and no mortgage lender cares what that is. Those Vantage scores can be significantly different than your actual FICO scores.

    You can see your Experian FICO 8 for free at At you can get your Equifax FICO 8 for free.

    TransUnion is a little trickier to get for free, but if you sign up for a free trial at you can see all 3; you can cancel the trial before you have to pay, and repeat again as needed.

    These are all FICO 8 scores, which is commonly used for most consumer credit decisions. There are a bunch of different FICO models which weigh factors differently for different purposes. For mortgages lenders typically use FICO 2 (Experian), FICO 4 (TransUnion) and FICO 5 (Equifax.)

    Having said that I don’t know of a way to get those particular scores without paying for them. Nevertheless your three FICO 8 scores are a good indicator of your overall credit worthiness. Don’t pay any attention to Vantage scores, they are not useful and often misleading imo.

  • ChargersFan1020

    lower your dti ratio, keep low to no balances on your credit cards, don’t have any personal loans, make payments on time, don’t close your oldest accounts. your monthly debt obligation will play a factor in how much you qualify for a loan. if you can have $0 monthly obligation that would be best. [Home loan purchase calculator]( use this to play around with your numbers.

  • trmoore87

    Your score isn’t great and your income is also an issue. Side job income is hard to prove if it’s variable and banks don’t love it.

    It there anything negative on your credit report?

  • Big___TTT

    Not as much as having a good down payment and showing your annual income with copies of current pay checks

  • TheBimpo

    It’s very impactful. You improve it by paying all your bills in time over time, there are no shortcuts. You can move it quite a bit in a few years. Just pay on time, every time, and it’ll rise.

  • milespoints

    Why is your score below 700? Are you carrying high balances? And late payments or collections?

    Your problem will likely be your income, as you won’t qualify for much in terms of a mortgage

  • godotheblue

    Bought a house last year with a similar income and credit score. Also no kids or partner. Check out FHA also, buying a house was a lot easier and reasonable than I expected

  • DutyAny8945

    Are you using credit? Banks like to see a history of responsible credit use. This means using credit regularly (i.e. every month) but not too much (i.e. do not even approach your credit limit) and of course paying it off in full and on time. If you don’t have a credit card, get one, use it for a couple small purchases or one bill every month, and set it to auto pay in full. If you’re using one card too much (getting close to or actually maxing it out) back off.

  • DeoVeritati

    About 35% of the score is on time payments and about 30% is credit utilization (of which people with the highest scores tend to only utilize about 10% of their available credit, so if you have $10k credit limit, they use $1k/mo). Credit utilization doesn’t have a memory to my understanding, so if you max it out one month, get dinged, and go back to normal the next, your credit scores should be more or less the same.

    Therefore, an easy win would be to request a credit limit increase if you haven’t recently and do so every 6 months.

    The rest of your score is a mix of #of credit lines/average age of account/credit pulls which there isn’t really a good short term answer for those.

  • yes_its_him

    While OP is getting answers to his specific situation, someone should have provided the overall answer to the headline question. That has two parts:

    1. There is a minimum credit score required for certain mortgage types. For conventional mortgages, that’s about 620. It can be lower for FHA mortgages. If you are below that, you won’t get a mortgage approved.

    2. Then once you have the minimum score, your credit score affects the interest rate and PMI you would pay. Lower credit scores mean higher interest rates and PMI costs (if needed.)

  • Unfair_Isopod534

    Here is an amazing government managed website full of basic info

    When I was buying my first home, I learned a lot from it. It was great because when people were talking about house buying, I could double check and verify things. Lots of that info is common knowledge, here it is just in a nice organized way.

  • SecretRecipe

    Your income is going to be a far larger limiter for you than your score. With that income you’re only going to be looking at qualifying for like a 150k house and that’s with a 20% down payment.

  • zuquack

    Credit score is key for buying a house. A higher score unlocks better interest rates, saving you money over the loan term. 660-700 is decent, but aim for 740+ for the best rates.

  • jeffweet

    It doesn’t impact you buying a house. It impacts your ability to get a loan and your rate and maybe points.

    I’ve seen rates vary by .5% which is huge over a 30 year loan – purely based on credit score

  • Gofastrun

    You wont have access to the best interest rates until your credit score is in the mid 700s.

    Based on your income, $15k down and current interest rates the most house you could probably afford is probably $140-170k depending on how consistent your side business is.

    The average home in the US is $500k. You’ll have to buy in a pretty low cost area.

  • Aggythaggy26

    I purchased my 3 unit multi family home with a credit score of 661. Went with the FHA route in 2021

  • karmxchameleon

    Of course it is extremely impactful. It’s not your credit score per se, it is your utilization ratio. If you have high debt you are most likely a liability and cannot make mortgage payments.

  • nari422

    I know my few friends had worst score 640 (50$ delinquent) and still got approved. They had high paying gross. Not sure pay helped.

    You can try few mortgage companies with soft score hit to see if you pre qualified or not and how much if you through.

    I tried using affordability calculator with 60k/year and monthly debts 250$ which qualifies you at 200k loan.

  • Random_Name532890

    Lower usage. Only use like 5% of your limit. If you don’t have enough limit for that, get more cards. But also not too many at once.

    And simply time. Pay off on time and wait.

  • tanhauser_gates_

    Depends on the down payment.

    Bought in 2023. My credit isn’t great but I was able to put down 60%. The mortgage broker basically said at that level credit score doesn’t really matter.

  • NancyLouMarine

    Federal law mandates a minimum credit score of 620 for a mortgage and 680 for a HELOC.

  • Maine2Maui

    Work on your down payment savings to build that up. Keep your ccs paid off and on time. Mortgage costs should be 40% of your monthly gross max, 30% is better. Lenders look at that as an indicator of cash flow capacity. Look at your current rent costs and how that would translate into a mortgage payment in today’s rate environment. If you can pay a $1000 monthly rent you can pay the same or slightly more as a mortgage due to tax benefits. If you don’t understand that go talk to your financial institution about your numbers and see what they tell you about their lending standards and ratios. Look online for information and education on this…lots of stuff from money sites, lenders, government etc. The more you understand about this the better you can plan.

  • fullthrottle13

    It impacts it enormously. You’re talking about several percentage points in interest rates.

  • Finanthropist

    Honestly I’d just shop around with a mortgage broker. My own situation: credit score was 634 but I did get pre approved for a mortgage at 4.99% 5 year fixed, high ratio. Income at time of approval was 58k a year, also had an extra 25k a year from a side hustle (variable income, 2 year average). I had wanted to get the score up to above 700 before going for pre approval. I’m not sure of my interest rate would have been lower if I had better credit but 4.99% wasn’t bad for 2024

  • moiraine88

    When you start looking to buy a house, stop using your credit cards or pay them off before the cycle closes. It makes a huge difference what your revolving credit is, and reflects immediately on your credit score whenever it’s pulled.

    I didn’t realize this and didn’t watch my cc spend, score dropped around 20 points. Next month it popped back up but it didn’t matter because the lenders already ran their check and said they wouldn’t run it again.

  • Hungry_Assistance640

    Well your gonna get approved for probably 135ish I imagine your score is fine but will probably get a 10% rate could buy it down with points if you wanted.

    Your income and debt is gonna be more of an issue then your score car payments loans credit cards?

  • Hungry_Assistance640

    It’s wild probably would be easier to get a loan in a duplex tbh or even a 5 plex. Although maybe not your income still is not there

  • Budget-Coconut2501

    Imagine four legs of a table one of the legs is your down payment, the second leg is your debt to income ratio the third leg is your credit score and last leg is the type, value and condition of the property. Many programs have specific minimum credit requirements and mortgage insurance on conventional loans are credit score driven

  • Slight_Judge_3978

    Check your state for local down-payment assistance programs. With your income, you should qualify for assistance, especially being a first time home buyer. That way you won’t have to dig so deep or deplete every bit of savings you have on down payment and closing costs. You should also build an emergency fund, separate from your down payment savings, with 3 to 6 months of all expenses, including rent or estimated mortgage payments you are looking at paying. The bank will like seeing that and it will help show that you can afford the mortgage and will have emergency money for incidentals in the event something breaks after you buy.

    Edit: To add to this, I think you need to wait it out for a couple of years to save up and get yourself in a better situation all around. As others said, your score isn’t the best and $15k is pretty low, with no other emergency fund funded. Try to save another $10k-15k, not including your emergency fund, take some time to work on your scores and then go sit down with a mortgage broker and look at your situation. Just be sure to explore assistance programs and grants to help you out. Good luck!

  • sackdady

    Credit score is an easily fixable problem. You can hire a credit repair specialist who can bring your score up to 740+ in a matter of a few weeks. They usually charge $250-$300 per derogatory remark per credit bureau. Mortgage lenders generally pull from all three bureaus so about $1k per derogatory remark. I have done this myself and helped others do this as well so I know it works.

    I dont know exactly how they do it but my understanding is The repair specialist basically goes on letter writing campaign to the credit reporting bureau and identifies small in accuracies in the way remarks are being reported.

    As others have mentioned, your biggest issue will be your income. Self employment is not considered unless you have been “self employed” in the same line of work for over two years.

  • Sgt-pepper-kc

    Where are you looking to buy? At current income and credit score with current rates, with no other debt, you’re looking at roughly a $175k house with $20k down.

  • joeyenterprises

    Pretty important if you need a loan, your rate will be heavily based on that.. so over 30 years if ur rate is x% higher, u will be paying x% higher each year for the length of your loan.

    I would say ur credit score is mainly for buying a house and car since those are the main things people use loans for …

    Keep using ur credit cards and paying them off!!

    I went from 550 – 750 (now) so u can do it too!!

  • Neat_On_The_Rocks

    In your income bracket the most simple pro tip
    I can give is to wait until you have no car payment.

    You need to have the best debt to income ration you can, and at your income that basically means clear all your debt. Car payment is usually the biggest mover in this income bracket.

  • SwagSloth96

    I bought my first house (300k) a few years ago with a 620 credit score and 60k income. You’ll be fine.

  • patience_notmyvirtue

    You get the same rate once it’s over 720

  • MammothMonkey818

    I think it would be tough with this income and credit. Maybe consider purchasing a house with a friend that’s in a similar situation? A couple of my buddies did it and it went well. Once one was ready to move on the other bought his half out

  • CKingDDS

    Score dictates how reliable you are and sets a certain interest rate. Your income dictates how much money will be loaned to you as it shows how much you are actually able to pay back. Both of yours are not very good for purchasing a home unless you live in a really low cost of living area.