Your Credit Score Impacts Your Home Loan

In today's world of mortgages, credit scores are very important. They're used to measure a borrower's risk when underwriting the home loan. The higher your score is, the better your qualifying and loan pricing will be.


Your credit score is based on your track record of making payments and managing your credit. The score is calculated from a variety of credit data in your credit report, by using a formula created by the Fair Isaac Corporation called a FICO score. The percentages in the chart below reflect how different aspects of your credit are weighted in determining your score.

Credit Score Pie Chart
  • 740 - 850 - Excellent – The best financing terms and represents the best score
  • 700 - 739 - Above Average – Qualifies to receive favorable financing
  • 675 - 699 - Average – Will qualify for most loans
  • 620 - 674 - Below Average – Qualifying depends on loan program
  • 500 - 619 - High Risk – You need to work on improving your rating

If you have a lower score, the good news is that negative items will diminish over time. The older a negative item becomes, the less it adversely impacts your credit score. The law states that a derogatory item "CAN be" reported for 7-10 years, but it does not state that it "MUST be" reported. In many cases, negative items may be deleted after 3-4 years. The fact is you can begin to improve your credit score immediately.

If your FICO score is less than ideal, I can help you to determine your best course of action, so we can get you on the right path to securing a home loan.

We'll walk you through each step of the loan process.
Contact us today to get started!