Credit Score For Home Buying

In order to get a mortgage loan for a home, you will need a credit score. For this, the higher your credit score, the better - a goal is to have a credit score in the high 600’s to 700’s. However, you do not need perfect credit to get a home loan, but the better your credit, the more choice you will have in home loans, as it indicates to the lender you have a good history of repaying your loans.

Most home loans have a minimum credit score of 620 to buy a house. A higher score will increase your chances of approval, and potentially get you lower interest rates. For example, borrowers with a 650 credit score make up a small portion of closed purchase loans. A credit score of 740 or above will likely get you the lowest interest rates, generally speaking.

Different types of loans require different credit score minimums. Some examples are conventional loans with a minimum credit score of 620, FHA loans with a minimum credit score of 500, VA loans and USDA loans with a minimum credit score of 640, and jumbo loans with a minimum credit score of 700 (approximately and pending future change). 

There are also a number of ways to increase your credit score. Paying bills on time is the best way to increase your credit score. Other ways include maintaining low credit balances by using no more than 30% of the limit on your credit cards, keeping credit cards open, and applying for new cards although this should be done sparingly.

To learn more about credit scores and their impact on buying a home, contact us today! At ProVisor, we offer transparent mortgage solutions for home buyers through loans and mortgages in the Milwaukee, Waukesha, Madison, East Troy, and Midwest areas.