What’s a Good Credit Score for a Mortgage
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Purchasing a home is a dream for many Americans. However, only a small portion of people have enough cash on hand to buy a home outright.?Luckily, aspiring homeowners can take out mortgages to make their American dream come true.
If you’re interested in applying for a mortgage and purchasing a home, you may be wondering what the credit score requirements are. The minimum credit score you’ll need to qualify for a mortgage varies depending on?the type?of mortgage you apply for. If you want to qualify for a low-interest rate, you’ll most likely need a credit score well above these minimums.?
So, what’s a good credit score for a mortgage? Below, we’ll break it down for you.?
What Components Make Up Your Credit Score
Before we jump into the mortgage credit score requirements, let’s review the five factors that make up your credit score.?Ninety percent of lenders look at FICO credit scores during the mortgage application process.?Your FICO credit score is based on your:
Credit scores can range from 300 to 850. The higher your credit score is, the better.?
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What Credit Score is Required to Buy a Home?
Lenders’ credit score requirements may vary, but you typically need a credit score of 620 or above to qualify for a mortgage.3?However, having a credit score of 620 doesn’t guarantee that you’ll get approved. Other factors can impact your eligibility.?
Additionally, most lenders prefer to lend money to borrowers with credit scores that are well above the 620 minimum. In fact, borrowers with credit scores below 650 make up?a tiny portion?of all mortgage holders.?
Having a high credit score can help you qualify for a mortgage, as well as more favorable terms, such as: