What Kind of Credit Score Do You Need to Get a Home Loan?
Your credit score is an important measure of your financial stability and health. It's at the core of any loan or line of credit, including home loans. A credit score not only determines your loan approval but the terms of the loan, too. If your credit score is good, you'll enjoy lower interest rates and payments. If you have bad credit, expect to pay more for your loan upfront and over the life of the mortgage. In general, credit scores are ranked like this:
Credit score between 760-850 is considered excellent
Credit score between 700-760 is considered very good
Credit score between 660-699 is considered good
Credit score between 620-660 is considered fair
Credit score between 580-620 is considered poor
Credit score between 500-580 is considered very poor
Each loan that you will apply for will come with a minimum credit score. The minimum credit score could be derived from regulations -- for instance, an FHA loan tends to have slightly more lax credit requirements than a conventional loan. To get the most common home loans you will need the following credit scores:
An FHA loan typically requires 500
VA loans have no established minimum credit score
USDA loans typically require 580
Conventional loans typically require 620