Blog > What Is a Good FICO Score When Buying a House?
One of the most common scores used by mortgage lenders to determine credit worthiness is the FICO® Score (created by the Fair Isaac Corporation). FICO® Scores help lenders calculate the interest rates and fees you’ll pay to get your mortgage.
Scores differ whether you’re applying for a loan insured by the Federal Housing Administration, better known as an FHA loan; one insured by the U.S. Department of Veterans Affairs, known as a VA loan; or a conventional mortgage loan from a private lender. Therefore the minimum credit score you need to qualify for a mortgage loan depends on the type of loan you’re trying to obtain.
The lender also determines how low of a score they will work with. Some lenders will work with a credit score below 580. An average credit score is 620 to 680. Very good is 680 to 740. 740 and above is considered golden. So there you have it good, better, and great!
We all have to start somewhere so don’t be discouraged if your FICO score is not where it needs to be today. I’ve got you, I have some solutions for you. I work with amazing lending partners who are willing to provide you with an action plan where you will have to put in the work so you can eventually purchase your first or forever home! I also work with great credit repair partners if you’d prefer to go that route.
Data from your credit report goes into five major categories that make up a FICO score, the most widely used type of credit score.
Payment History – 35% – Account payment information, including any delinquencies and public records.
Amounts Owed – 30% – This category is basically credit utilization or the percentage of available credit being used/borrowed.
Length of Credit History – 15% – The length of time each account has been open and the length of time since the account’s most recent action.
Types of Credit Used – 10% – The mix of accounts you have, such as revolving (credit card) and installment (auto loans, mortgage).
New Credit – 10% – Your pursuit of new credit, including credit inquiries and number of recently opened accounts.
About the author: The above Real Estate information on what is a good FICO score when buying a house was provided by Latrice Womack, a licensed Texas REALTOR®. Latrice can be reached via email at info@LatriceWomack.com or by phone at 682-422-7264.
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