How Do I Establish My Credit?

Mortgage Credit 101

In order to qualify for most mortgage programs you usually have to have a middle credit score above 600. We do have investors that will accept scores below 600.  If you have scores in this range it is possible to qualify for a home mortgage however additional documentation is required. 

Other factors that help your credit picture are:

  • A a solid 2 year job history with no gaps in employment more than 30 days.
  • Cash Reserves with at least 2 months of estimated payments and whatever cash is estimated to be needed to close your loan. 

One of the easiest ways to build a credit history is through the use of "Secured Credit Cards". A secured credit card is a Mastercard or Visa card account that is opened using your own money as the security for the credit limit on the card. For the RD program you must have (1) open credit account that reports to the credit bureaus, with a 12 month payment history. In addition you may need a verification of rental payments for a 12 month period and alternate lines of credit that can show a 12 month payment history. An FHA or a VA loan may require (3) open lines of credit with a 12 month history.


  • Don't let your credit card monthly balance exceed 30% of the available credit limit on the card. 
  • NEVER make a payment late. A late payment can drop your credit scores as much as 75 points and can adversely affect the scores for up to 12 months.
  •  Don't pay your entire balance off every month. Leave a small balance to carry over into the next month. This will actually help to build your scores faster.
  • If you have no other open lines of credit besides the secured credit cards, the new cards normally have to have a 12 month history to count as a valid line of credit for home mortgage purposes. 

Secured Credit Card Source