What Average Credit Score Do You Need to Buy a House?
Posted on 17 August, 2020 by Miranda Bottas in Boost Credit Score
What is the average credit score required to buy a house?
Your credit score reflects a lifetime of your financial management and has a strong influence over your borrowing ability and interest rate.
Lenders use it to estimate your trustworthiness as a borrower and determine whether you can qualify for a loan. Anyone seeking to finance a home should know what their personal credit report looks like. They should also understand the various ways to boost your credit score if it will help them benefit.
Ultimately, no universal score can guarantee your approval for a loan to buy a house. When it comes to the credit score needed to qualify for a mortgage loan, the minimum requirements will vary by lender and the type of mortgage loan you are applying for.
What is the minimum credit score required?
If we look at the different types of loans and the minimum score they require, we can see that most conventional lenders do not require you to have 800 score. Instead, they typically require 620 to 640 to be the minimum. But, at the same time, some government-backed loans will view you as a borrower if your credit score is as low as 500, provided you meet specific other criteria which is usually related to income and steady employment.
In most cases, mortgage lenders consider the FICO® score for mortgage qualification. They use your score from three major credit bureaus: Experian & Transunion, and Equifax. As your credit score can vary slightly between them, it is up to a particular lender to determine which one they'll use to estimate if you meet the loan requirements.
Generally speaking, the qualifying average credit score number usually ranges from 662 to 730. Therefore, you're in an excellent position to get the most favorable loan terms and interest rates on loans if you're within those numbers (or higher). Of course, this number may change depending on the state and city. Regardless, the higher your score, the more affordable your mortgage loan will be in the long run.
What is the average credit score in your state required?
If you want to know the average credit score in your state, look at the list below.
- Alaska: 686
- Alabama: 668
- Arkansas: 667
- Arizona: 671
- California: 701
- Colorado: 694
- Connecticut: 689
- District of Columbia: 730
- Delaware: 669
- Florida: 673
- Georgia: 671
- Hawaii: 715
- Iowa: 682
- Idaho: 684
- Illinois: 684
- Indiana: 670
- Kansas: 684
- Kentucky: 669
- Louisiana: 667
- Massachusetts: 705
- Maryland: 680
- Maine: 683
- Michigan: 679
- Minnesota: 695
- Missouri: 676
- Mississippi: 662
- Montana: 693
- North Carolina: 683
- North Dakota: 696
- Nebraska: 690
- New Hampshire: 696
- New Jersey: 697
- New Mexico: 673
- Nevada: 682
- New York: 703
- Ohio: 678
- Oklahoma: 672
- Oregon: 700
- Pennsylvania: 688
- Rhode Island: 683
- South Carolina: 671
- South Dakota: 689
- Tennessee: 675
- Texas: 671
- Utah: 690
- Virginia: 688
- Vermont: 695
- Washington: 698
- Wisconsin: 689
- West Virginia: 672
- Wyoming: 671
The list above can help you determine if you fall within the area required to finance a home mortgage. If your credit score is in good standing, you may have multiple options for loan types to choose from. On the contrary, if your credit score is too low, your options may be limited or non-existant.
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