Is my Credit Score Good Enough to get a Mortgage Loan?

Many people wonder how high their credit score has to be to qualify for a mortgage loan. Lenders use FICO to determine if you qualify for a mortgage loan. If your credit rating is 720 or better, you"re considered to have perfect credit. Scores ranging between 620-650 are considered to be average or sub-par credit. If your score is under 620 then you are considered a higher risk for a loan. There are no guarantees that your credit score can provide you when it comes to getting a mortgage loan. The final decision is entirely up to the mortgage lender. Mortgage lenders factor in other variables such as salary, employment, debt- to- income ratio and your savings.

There are lenders that specialize in loans to individuals with low credit scores. These lenders will often require more information to approve the loan. They may ask you for your W-2s, recent bank statements. Your interest rate is typically higher because you are considered a high risk.

It is important to keep up with your credit score as well as your risk factors. Risk factors make a direct impact on a lenders decision on loan. These factors vary from bankruptcy, payment history, to delinquent bills. Ask for your credit report and credit score anytime you make an inquiry on your credit.

Although most lenders use FICO to determine your qualifications of a loan, some financial institutions will use other credit collection agencies. So don"t be alarmed if you received two different credit scores from two different lenders. Usually the different scores are close and rarely affect your loan.

Contributing National Staff Writer

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