What first-time buyers need to know about credit scores

Credit scores and first-time home buyers

If you're planning to buy your first home in Atlanta, you need to know the ins and outs of your credit score. FOX 5 real estate expert John Adams breaks down the details.

If you're planning to buy your first home in Atlanta - whether it's a cozy ranch in Decatur, a condo near Midtown, or a quiet spot in College Park - you’ve probably heard about FHA and VA loans. These programs are great for first-time buyers because they offer low down payments and flexible credit requirements. But before you start browsing listings or scheduling open houses, there’s one key topic FOX 5 real estate expert John Adams says you need to understand: your credit score.

What is a credit score?

A credit score is a three-digit number that reflects your financial reliability. Lenders use it to decide how likely you are to repay borrowed money. The most common scoring model is the FICO score, which ranges from 300 to 850. The higher your score, the better your chances of qualifying for a mortgage with favorable terms.  A new scoring model, called VantageScore 4.0, is being used more frequently - and it allows your final score to be boosted by on-time rent payments. 

Adams recommends viewing your credit scores on CreditKarma because they are reliable and free.

Here’s a quick breakdown:

Score Range Rating

800–850 Excellent

740–799 Very Good

670–739 Good

580–669 Fair

300–579 Poor

In this photo illustration the Visa, Mastercard and American Express logos are seen on credit and debit cards. (Photo by Matt Cardy/Getty Images)

Your score is based on five key factors:

• Payment history (35%) – Have you paid your bills on time?
• Amounts owed (30%) – How much debt do you currently carry?
• Length of credit history (15%) – How long have you had credit accounts?
• Credit mix (10%) – Do you have a variety of credit types (credit cards, loans)?
• New credit (10%) – Have you recently opened new accounts?

Why credit scores matter for FHA and VA loans

If you're applying for an FHA loan, you’ll typically need a score of at least 580 to qualify for the 3.5% down payment option. VA loans don’t have a set minimum score, but most lenders prefer to see a score of around 620 or higher.

Here’s why your score matters:

• Loan approval – A higher score improves your chances of qualifying.
• Interest rates – Better scores often mean lower interest rates, which can save you thousands over time.
• Loan terms – You may qualify for better terms, such as reduced fees or more flexible repayment options.

How to improve your credit score

Improving your credit score takes time and consistency, but it’s achievable. Here are some practical steps:

• Pay your rent on time - Some Credit Scores can now reflect rent & utility payments.
• Pay bills on time – This is the most important factor. Set up reminders or automatic payments.
• Lower your credit card balances – Try to keep your usage below 30% of your total credit limit.
• Limit new credit applications – Opening too many accounts can temporarily lower your score.
• Review your credit reports monthly – You can view reports and scores for free at CreditKarma.com. Dispute any errors you find.
• Keep older accounts open – The length of your credit history matters, so avoid closing long-standing accounts unless necessary.

Tips for Georgia buyers

• Get pre-approved – Before you start house hunting, get pre-approved for a mortgage. It helps you understand your budget and makes your offer more competitive.
• Work with a housing counselor – HUD-approved counselors can help you build a personalized plan to improve your credit and prepare for homeownership.
• Budget for Atlanta living – Owning a home means more than just a mortgage. Be sure to account for property taxes, insurance, maintenance—and yes, the time and cost of sitting in Atlanta traffic. Whether you're on Interstate 285, 75, or trying to navigate Peachtree Street (all 50 versions of it), traffic is part of the lifestyle here.

The bottom line

Think of your credit score as your batting average—it’s what gets you into the game. And just like the Atlanta Braves rallying in the bottom of the ninth, you can turn things around with the right strategy and a little persistence. Homeownership in Georgia is within reach, and with smart planning, you’ll be ready to step up to the plate.