What's the Minimum Credit Score For a Home Mortgage Loan?

The most common type of credit score is the FICO standard and it ranges from 300 to 850. It is difficult to quantify a specific minimum score for a home mortgage loan, but anything below 650 is considered undesirable. As you already probably know, the decades of easy money are over. Even since the financial collapse, banks are taking a very close look at all applicants. Even very qualified applicants are being rejected because banks do not want to take any chances with applicants.



If you have always made payments on time, it is likely you will be granted a loan. Also, not all loans are created alike. If you have a high FICO score, you will be given a lower interest rate and more favorable terms. You can increase your chances of receiving a loan by reducing your debt to income ratio.



You can request a free credit report from each of the three monitoring agencies once a year. You will not be required to enter any financial information or be required to cancel after two weeks.



It is really free. Make sure there are no discrepancies between the different reports and report any inaccuracies immediately that may negatively affect your chances of securing a loan. You can also improve your FICO score by paying off your credit card on time and avoiding late payments. Lenders may overlook a somewhat low credit score if they notice you have been consistently making payments on time and are re-building your credit.



Defaulting on a loan and bankruptcy will severely hurt your credit score.



If needed, reduce your monthly expenditures and reduce your card limit.