If you plan to get a mortgage, one of the requirements is a superior credit score. This score is given by a widely-used credit scoring system which is the Fair Isaac and Company (FICO). This score is needed by those who would like to take on a home loan. The lowest score is 300 while the perfect one is 850.
Being in a good credit score range when it comes to applying for a home loan puts you at a tremendous advantage. A credit score is a three digit representation of how well you handle your credit and if you will make your payments back on time. People who apply for a housing loan will definitely have their credit scores checked and verified before a bank or finance company is willing to take on the risk of lending them money. The better your credit score is, the better you stand being approved for the home loan.
740+ Is Best, 620+ OK
The FICO score is computed with your credit history as the basis. This number serves as a representation of the lender’s risk level when you borrow money from them. If you have a high score which is from 740 to 800, the risk is lesser. Borrowers need to have a score of 620 or more to get their loan application accepted. Those with a low score can still be approved for loans but at very high interest rates. Many lenders most likely will not finance a housing loan with people having a very poor score.