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You don’t have a separate rating called a mortgage credit score, but lenders do look at your score, credit history and several other factors when deciding whether to approve you for a home loan. Contrary to what some people think, though, you don’t necessarily need an excellent or good credit score to get a home loan. How high your score is depends on your current financial situation, down payment and other factors.

What Does My Credit Score Need to Be for a Mortgage?

The short answer is that it depends. Mortgage lenders will do a hard inquiry on your credit to see the score and the details behind it. Your credit score is typically a good first impression on how risky of an investment you are. Mortgage lenders don’t want to be left holding the keys to your home if you don’t or can’t make regular monthly payments, or if you make late payments, on your home loan.

Factors that can impact whether your credit score is high enough to be approved for a mortgage include:

  • What type of home loan you’re seeking
  • How much other debt you have
  • The details of your credit history, such as positive and negative items reported to the credit bureaus
  • The size of your down payment

FHA mortgage loans may be among the easiest loans to get in terms of credit score requirements. Individuals who qualify as first-time home buyers under FHA (Federal Housing Administration) backed lending programs may be able to qualify for mortgage approval with a credit score as low as 580 and a low down payment of only 3.5%. In cases where buyers can put forward 10% or more for a down payment, some lenders may approve individuals with FICO scores as low as 500.

For more conventional loans—those that meet the underwriting standards put forth by Freddie Mac or Fannie Mac—approval usually requires a good credit score. At minimum, these types of loans usually require a FICO score of around 620, but that assumes other factors are in your favor. A lower down payment or higher credit utilization, among other things, could mean you need a higher credit score to secure mortgage approval.

What Is a Decent Credit Score for a Mortgage?

The answer is probably 620 or higher. You do want to minimize any surprises during the mortgage application and home buying process. Take the following steps to avoid this risk.

  • Get a look at your credit score and report. If you have bad credit, consider taking steps to improve your credit score.
  • Dispute or work with a credit repair company to fix any inaccuracies on the report before you apply for a mortgage.
  • Evaluate whether your credit history and score positions you to achieve your homeownership goals now or if you should take time to improve your score organically first.
  • Research the mortgage process so you understand how it works.
  • Consider working with a mortgage broker if you’re uncomfortable with the entire process. These pros can often help you understand which type of mortgage is right for you and how to qualify for it.

Can You Buy a House with a Credit Score of 590?

You may be able to qualify for an FHA or nontraditional home loan with a low credit score. Your chances of doing so are higher if you can tie your low score to a single issue and you otherwise have a strong credit history. You can also increase your chances by lowering your credit utilization rate, having a low debt-to-income ratio and saving up to put a large percent down when you buy the home.

Should You Get a Mortgage with Your Current Credit Score?

Ask yourself this important question: Are you so preoccupied with whether you can get approved for a mortgage with your current credit score that you forgot to ask yourself whether you should?

Your credit score impacts more than whether or not a lender approves you for a home loan. It also impacts your loan and term options, which can impact the overall cost of the home. One of the most important parts of the mortgage that may be tied directly to your credit score is the interest rate.

A good or bad credit score can mean a shift up or down for your mortgage interest rate. And even a fraction of a percent in either direction can drastically change how much you pay for your home. Consider the examples below, which are applied to a $200,000 home loan for a term of 30 years.

  • An interest rate of 3.92% equals payments of $946 per month and a total home cost of $340,427 over 30 years.
  • An interest rate of 4.42% equals payments of $1,004 per month and a total home cost of $361,399 over 30 years.
  • An interest rate of 4.92% equals payments of $1,064 per month and a total home cost of $382,999 over 30 years.

Just a difference of 1% can result in savings (or losses) of more than $40,000 over the life of your mortgage. Use Credit.com to check credit score and credit report card to make sure your credit score is as high as possible before you start the mortgage application process.

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  • mike irwin

    can i get a va home loan with a credit score 580

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  • yenia horton

    Hello Estoy discgustada porque jamas en mi vida e tenido mal credito solo tengo 3 anos de tener credito en EU, y me lo an danado injustamente solo porque quede mal con una tarjeta de credito de el bbva pero no fue por negligencia si no porque tenia que viajar a mi pais Panama de emergencia y mi esposo quedo encargado de hacer los pagos y se le paso pero esa tarjeta era por 2,000.00 y solo quedo un saldo de 900.00 eso fue lo que me iso quedar mal y no fui yo directamente y despues se iso un arrego de pago y el pago 200.00 y quedo 700.00 y ellos no an mandado mas recibo de ese banco y queremos pagar pero lo mas curiosoes que e tenido otras tarjetas de mall y las e cancelado y las doe que me quedan de el mall se pagan todos los meses sin parar y no es gran cosa el credito es bien bajo, entoces ud porque me tienen mal credito
    no es justo a mi me gusta ser responsable con mis pagos , por ejp quiero en este momento una tarjeta e credito de el chase que es de millas y todabia no me an contestado y lo mas provable me digan no por causa de ustedes que ya tube chequera con ellos y quede bien , mi unico herror mas bien el de mi esposo es habercatrasado en la otra y yo esa del bva pagaba atiempo y mucho mas de lo que era ,porfavor busquen otro metodo mas moderno para que no perjudiquen al consumidor , yo traabaje en tres bancos en mi pais Royal bank of Canada, Banco Nacional de Panama ,
    Banco Santander, y se lo que es trabajar con banco soy Lic en Turismo y me dedico cuandoestoy en mi pais que adoro trabajo en Bienes Raices ,,,,,estoy en EU porque mi esposo es Norteramericano anglosajon y tengo mas de 11 anos de estar casada con espero que porfavor me arregen mi credito porque me estan haciendo mucho dano injustamente…..Yo estudie en parte en EU y halo el ingles y lo leo escribo pero me encanta usar mi lenguajes se de algunas leyes Sres,,,,,,,,,,l

    Atte, Yenia Horton

    Ps,,,,,, espero me contesten amablemente ademas yo trabaje con el comando Sur de los EU en Panama cuanestan con nosotros y siempre mne expresado bien de udes y e peleado por ese pais verbalmente………..muchas gracias espero esto no se quede en el aire y busquen un lugar donde podamos dar sugerencias,,,,,,,,,,,,,,,,,,

  • b

    Thats how credit works. Those who need it cant get it because they need it. Those who dont need it get it all because they are low risk..and rarely use it because they dont need to. You will only have good credit when you make enough money that you dont need your credit anymore. The key to financial success is to focus on making more money not repairing your credit.

    • Snoop

      “You will only have good credit when you make enough money that you dont need your credit anymore.”
      That is COMPLETELY INCORRECT! My goodness… I hope no one took this silliness seriously! You need more than “make enough money” to have good credit. You have NO IDEA the harm you’re proselytizing!

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  • Vern

    I ,ll tell you one thing, if you really need the credit you probably won,t qualify.

  • Will

    It’s worth noting that if you are declined for ANY loan the lender is legally obligated to give you any scores they used to determine this. Obviously they won’t offer this information unless you specifically ask for it.

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