Credit Score Mortgage Calculator – NerdWallet

Mortgage Credit Score Calculator FAQs

What should my credit score be to buy a house?

You might be surprised at the minimum credit score to buy a house. On paper, mortgages backed by the Federal Housing Administration — otherwise known as FHA Loans – allow a minimum credit score of 500, as long as you make a 10% deposit. That’s about as low as it gets.

However, with all types of mortgages, lenders can set their own minimum credit scores. So if your credit score needs work or you’re close to the dividing line between two credit score ranges, you should get quotes from several lenders. While your score might not qualify for the type of loan you want with one, it might be high enough for another.

Keep in mind that your credit score isn’t all lenders look at when considering applying for a home loan. Your debt to income ratioyour work history and the amount of your down payment all play a role in determining how much you will be allowed to borrow.

What is the best credit score for buying a house?

No real surprise here – a credit score of 740 or higher will give you the most loan options and the best mortgage rates. However, lenders will look at your overall finances, not just your credit score, when determining whether and how much you will be allowed to borrow, and what interest rate you will be offered.

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How can I increase my credit rating to buy a house?

If you put off buying your home until your credit has improved, you may be able to qualify for more types of loans and get a lower interest rate.

You can build credit quicklybut be aware that it takes time for new information to be reported to the credit bureaus – and therefore for you to see your updated score.

Here are some strategies for preparing your credit score for a mortgage application:

  • Pay all your bills on time. Late payments can affect your score, so try not to miss the due date on your credit card, car loan, or other regular bill.

  • Try to use less than 30% of your available credit. You don’t need to pay off all your credit cards at once. Making multiple payments a month can help reduce your credit usage while avoiding a shock to your bank account.

  • Dispute any errors on your credit reports. Incorrect information could hurt your score, so it’s worth taking the time to review your credit reports and correct any inaccuracies. You can request credit reports free from the three major credit bureaus.

And when you’re ready to apply for a home loan, be sure to submit all your applications within 30 days. Mortgage pre-approval requests result in a “hard shot” on your credit report, but if multiple lenders submit applications within a short period of time, they will only count as one.

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