When you own a home, it’s inevitable that sooner or later renovations or repairs are needed. Whether you have a problem with your hot water tank, heating, or roof or you just want to upgrade your kitchen or bathroom, a home improvement loan is a way to get the financing you need to pay for whatever needs to be done. When considering applying for a home improvement loan, the first thing to ask yourself is what credit score is needed for a home improvement loan?
Minimum Credit Score for a Home Improvement Loan
Your credit score is a three-digit number calculated based on a combination of factors involving the way you’ve handled borrowed money in the past. If your credit score is over 800, it’s considered exceptional and you’ll probably be approved for a loan at the best rates being offered. A score between 740 and 799 is considered very good, and a score of 670 to 739 is considered good.
While every lender is different, most lenders want to see a minimum credit score of 660 or 670. However, there are some lenders who may approve a borrower with a credit score that’s lower than that. Having a lot of equity in your property can improve your chances of being approved. If you don’t have great credit, you may be approved for a loan at a higher-than-average interest rate.
Other Options to Consider
A home improvement loan isn’t the only option to consider if you need to have an emergency repair done or want to do some renovations. A cash-out refinance uses some of the equity in your home to provide the cash you need while combining the additional funds with your mortgage into a single mortgage.
If you only need to do minor repairs, you may want to consider a personal loan since it wouldn’t be secured by your home. Another option for a small number of funds is using a credit card, especially if you’re able to get a card with a zero percent interest rate for a year or longer.
Things to Do to Improve Your Credit Score
If you’ve had some credit problems, you may want to work on bringing up your credit score before you apply for new credit. If any bills are past due, get them caught up as soon as possible. Once everything is current, always pay all your bills on time. If you have a lot of credit card debt, work on paying balances down to zero.
It’s important to review your credit reports periodically to make sure there isn’t incorrect information on them that could be impacting your score. When you do this, if you find any errors, they’ll need to be disputed immediately. Dovly is an automated credit repair engine that can help you work with the credit bureaus so that you can take the necessary steps to obtain the best possible credit score. Try it risk-free with our free membership tier. Get in touch with Dovly today.