Your credit score plays a major part in your ability to get a mortgage, what types of mortgages you can qualify for, and even how low your interest rate can go. The large majority, around 90%, of lending institutions use your FICO credit score to determine your credit worthiness. Fair Isaac Corporation (FICO for short) is a credit rating agency that calculates your credit score by compiling your credit history as reported by Experian, Equifax and TransUnion.

Your credit score is based on numerous factors such as your payment history, the types of debt you have, and how much you owe. Credit scores range from 300 to 850. A higher credit score says to a lender that you are a lower risk borrower; conversely a low score tells a lender that you are a more risky person to lend money to. So, the higher your credit score the more loan options and lower interest rates will be available to you.

Regarding mortgages, the types of loan programs you can qualify for will depend on your credit score. For example, a conventional loan guaranteed by Fannie Mae or Freddie Mac requires you to have a 660-680 minimum credit score. The FHA loan program requires a minimum score of 600. In order to qualify for a VA loan you will need at least a 620 credit score. To qualify for a USDA mortgage you will likely need a credit score of at least 680, however, there are some special situations that could allow for a credit score as low as 620.

During your pre-approval consultation with your Loan Officer we will get your permission to pull your credit report which will include your credit score. This information will help us to determine the best loan program to recommend for you.

What can you do? It is a good idea to know what your credit report says about you and to make sure it is accurate. You can get a free copy of your credit report once a year at www.annualcreditreport.com, a federally authorized website.