What Credit Score Do You Need To Buy A House

What Credit Score Do You Need To Buy A House

Image title


There are many misconceptions about the credit score needed to buy a house. Recently, it was reported that 24% of renters believe they need a 780-800 credit score to be considered for a mortgage. The reality is they are misinformed!

Only 25% of the Americans have a FICO® Score between 740 and 800. Here is the breakdown according to Experian:

  • 16% Very Poor (300-579)

  • 18% Fair (580-669)

  • 21% Good (670-739)

  • 25% Very Good (740-799)

  • 20% Exceptional (800-850)

Randy Hopper, Senior Vice President of Mortgage Lending for Navy Federal Credit Union said,

Just because you have a low credit score doesn’t mean you can’t purchase a home. There are a lot of options out there for consumers with low FICO® scores,”

There are many programs available with low or no credit score requirement. The Federal Housing Administration (FHA) now requires a minimum FICO® score of 580 if you want to qualify for the low down payment advantage. The US Department of Agriculture (USDA) does not set a minimum credit score requirement, but most lenders require a score of at least 640. Veterans Affairs (VA) loans have no credit score requirement.

As you can see, none of them are above 700!

It is true that the average FICO® score for all closed loans in January was 726, but there are plenty of people taking advantage of the low credit score requirements. Here is the average FICO® Score of closed FHA Loans since April 2012 according to Ellie Mae:

Image title


As you can see, that number has been dropping for the last seven years. As a matter of fact, the average FHA Purchase FICO® Score reported in January 2019 was 675!

One of the challenges is that Americans are unsure about their credit score. They just assume that it is too low to qualify and do not double check. Credit.com confirmed that only 57% of individuals sought out their credit score at least once last year.

FICO® reported,

Since October 2009, the average year-over-year FICO® Score has steadily and consistently increased, from a low of 686 in 2009 to the latest high of 704 as of 2018.”

Here is the increase in the average US FICO® Score over the same period of time as the graph earlier.

Image title


Bottom Line

At least 84% of Americans have a score that will allow them to buy a house. If you are unsure what your score is or would like to improve your score in order to become a homeowner, let’s get together to help you set a path to reach your dream!


Lance Whipple PA Headshot
Author:
Phone: 407-494-6030
Dated: March 20th 2019
Views: 252
About Lance: Lance is a Retired Air Force Officer and skip-generation real estate agent -- his grandparents ran a...

Property Search









RSS Feed

View our latest blog posts in your RSS reader. Click here to access. RSS

Search Blog

Recent Blogs

The 1 Reason It Is Difficult To Find Your Dream Home - The #1 Reason It Is Difficult to
Four Tips For Selling Your Central Florida Home In A Hurry - Four Tips for Selling Your Central
A REAL STEAL BALMORAL RESORT TOWNHOME IN THE DISNEY AREA FLORIDA -   Resort Style Living
Choosing Your First Home - Can I Afford the House I want?One

Saved Properties

This is a list of your favorite properties. We will email you if a property is reduced or leaves the market.

Click 'Save' to add a property to this list.

Register / Login

New & returning visitors please enter your information to login.

By clicking 'register' you are agreeing to our terms of use & giving us expressed written consent to contact you.

Questions? Comments? Complaints?

This message will go directly to the head of our team.

Location & Address

EXIT Realty Champions
7830 Lake Wilson Road
Davenport, FL
863-292-6217
321-445-5568