When Buying a House What Credit Bureau is Used?

Mortgage lenders use classic FICO scores if they plan to sell the loan to Fannie Mae or Freddie Mac, which is the case with most mortgages. However, the types of scores will change in 2025 and lenders may use different scores for other mortgages. In the broadest sense, if you're a borrower with a credit score of at least 760, you'll likely be approved for the lowest mortgage rates. So, to what extent does your credit rating influence your interest rate? Over the course of a 30-year loan, even a fraction of a percentage point of interest can add up to tens of thousands of dollars.

If you're not sure what your credit situation is, a free credit snapshot is a good place to start. What a credit card issuer is looking for may be different from what a mortgage lender is looking for, so each scoring model is designed to meet different needs. If you're thinking about buying a home, you probably know that having a good credit score is important to qualify for a mortgage. This could save you thousands of dollars a year in interest or make the difference between qualifying for a loan and being rejected. If you have a higher credit score, generally above 740, lenders are more likely to give you a better deal on your loan.

Addressing mistakes before starting the process can be annoying, but dealing with them while you're trying to buy a home will be downright infuriating. Whether you want to achieve the minimum credit score that first-time homebuyers need to qualify for a loan (over 580) or simply want to qualify for a better mortgage rate, you'll want to maximize your score. You may prefer to wait until after applying for a mortgage to make expensive purchases with your cards, as these purchases will increase credit usage, which can reduce your rating. If you're looking to buy a home, your credit rating will play an important role in determining the mortgage rate and the amount of the approved loan.

If you're getting ready to apply for a mortgage, here are some steps you can take to improve your credit score first. Therefore, having a higher credit score can save you a lot in interest charges over the life of your mortgage. For a government loan, such as an FHA or VA loan, most lenders require a minimum credit score of 580. Once you've determined that you're ready to buy a home, you need to understand how lenders see you.

Alison Valentine
Alison Valentine

Incurable tv expert. Lifelong bacon fanatic. General internet trailblazer. Freelance social media enthusiast.

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