Minimum FICO Scores for a Mortgage

by Louise Balle, Demand Media

    You hold the cards when you call a mortgage lender or broker, until it's time to reveal your credit score. The future of your mortgage loan and the ownership of the home you have in mind depends on this three-digit score. Keep in mind that the minimum FICO score you need to get a mortgage loan is ultimately the decision of your individual lender. The lender may choose to be more lenient or more strict than usual.

    What Are FICO Scores?

    FICO stands for Fair Isaac Corporation. This company handles the calculation of credit scores for individuals based on credit reports and complex algorithms. The credit score is made up of five main elements: the payment history, balance on accounts, amount of time you've had a credit history, new credit accounts and the types of debt you hold. If you plan to apply for a mortgage loan in the near future, the lender has to pull this score first and foremost to determine if you're eligible. Credit scores range from 300 to 850.

    Required Score

    According to Bankrate, the lowest acceptable score to get a mortgage loan is about 620, as of 2010. The minimum score to get a mortgage loan with the best rates available, as of 2010, is about 730 according to Guy Cecala, who is the publisher of a mortgage newsletter called "Inside Mortgage Finance." So if you're looking to get the best rates possible, your score should ideally meet or exceed the last quoted figure of 730.

    Three Scores

    You have three credit scores—one for each major credit bureau (TransUnion, Experian and Equifax). The lender will look at all of these scores when evaluating your eligibility. The score that falls in the middle is the score that the lender uses to determine your rates. So for instance, if your three scores are 710, 690 and 740, the lender uses the 710 figure to determine the rate and loan package he can offer.

    Giving Your Personal Information

    When you start calling around for mortgage loans, the loan officers or brokers you call may ask you for your social security number and other private information to run a credit check to determine your FICO score. You do not have to give out this information until you make a final decision on a lender. So instead of quoting your life story to every lender you call, pull your own score ahead of time and tell each loan officer your middle score to receive quotes. When you make a final decision you can then offer your personal details.

    About the Author

    Louise Balle has been writing Web articles since 2004, covering everything from business promotion to topics on beauty. Her work can be found on various websites. She has a small-business background and experience as a layout and graphics designer for Web and book projects.