Keeping your credit rating healthy is always good, especially if you’re in the home buying process. A good credit score means you have a higher chance of qualifying for a mortgage with the best loan terms.

What is a good credit score? 

According to FICO, there are general score ranges recognized by creditors to help them make lending decisions. 

FICO ScoreRating

800+ – Exceptional

740-799 – Very Good

670-739 – Good

580-669 – Fair

<580 – Poor

How is your credit score determined?

Lenders typically use credit scores to assess your credit risk before deciding whether to approve or refuse your mortgage loan application. 

The FICO score is the most recognized and widely used credit score in lending decisions. Developed by Fair Isaac, your credit score is calculated based on five specific factors:

  • Approximately 35% of your score is based on payment history. Lenders want to know whether you have paid your credit accounts on time.   
  • Credit utilization makes up 30% of your score. FICO Scores consider the amounts you owe on your accounts and how much of your available credit you use.
  • Credit age is approximately 15% of your score. This is how long your credit accounts have been established.
  • FICO® Scores consider your credit mix (10% of your score). Your score considers what kind of credit accounts you have and how many of each.
  • 10% of your score is based on new credit. Opening new credit lines in a short amount of time represents a more significant risk for mortgage lenders.

So, what is a good credit score to buy a house? It depends on your lender and the mortgage loan you’re applying for.

What is the minimum credit score needed for each mortgage loan type?

Here’s an overview of a few different types of mortgage loans and their credit score criteria:

Type of Loan Minimum – FICO Score

FHA Loan – 580+ 

VA Loan – Often, VA doesn’t have a limit, but most investors do 620 

USDA Loan – 620+

Conventional Loan – 620+ but you can use a blended rate 

If you have no credit score and don’t want any hassle while getting a mortgage, we can build non-traditional credit for you!

Contact our experienced mortgage advisors at Belay Mortgage Group, who are experts in manual underwriting. 

Jodi White

Jodi White is the founder, owner, and principal mortgage broker of Belay Mortgage Group. With more than 15 years of experience in the mortgage industry in the Pacific Northwest, Jodi has successfully built a loyal clientele based mostly on referrals alone, as demonstrated by rating as a top mortgage broker in the Vancouver area on Yelp.