Plano MortgageOver the course of a lifetime, financial development can lead to some wonderful opportunities. A person’s financial development and state of affairs is something that is particularly important when it comes to taking out a bank loan to further progress in life, and the largest loan most people will require is a Plano mortgage for a Plano home purchase.

Since the process of getting approved for a mortgage is heavily dependent on credit history and that three-digit credit score that reflects reliability as a borrower, you should always put forth practices to keep that number healthy and growing.

However, how much importance does a credit score hold? Does that magic, three-digit number need to be above 700 in order to get approved for a mortgage?  Credit scores range from 300 to 850, and the higher the score – the better, but…

The FICO Score: The Magic Number That CountsPlano Home Loans

When you apply for a mortgage, you will have to provide certain information to your mortgage lender. The mortgage loan officer at your lender will then pull your credit score and your credit report from the 3 different credit reporting companies in the US ~ Experian, Trans Union, and Equifax.

Fair, Isaac and Company developed one of the formulas for determining your credit score (there are 3 different scoring models) and is the scorekeeper of your FICO score, which ranges from 300 to 850, 850 being the highest of all scores, and 300 being the lowest.

Every person in the United States has a FICO scores. Up to 80 percent of financial lenders will use a borrower’s credit score score in order to approve a mortgage application and determine a suitable interest rate on the loan.  There are also different scoring models for autos, personal, medical, other financial – all with slightly different algorithms to develop the score.  So it is possible that the credit score that you personally obtain from the credit bureaus will be completely different from your mortgage score.

The 600 Range: Fair And Good Credit Mortgage Options

If your credit score isn’t perfect (ie. above the 760 mark), you need not worry too much. There are many options available for those with credit scores greater than 620, and, with many different financial lenders to consider, having a mortgage approved sometimes means persisting with an application to several different lenders before receiving a “yes.”

Plano HomesWith a “fair” and “good” credit rating falling between 620 and 719, there are options available to get approved for a mortgage well under the perfect 800 mark.  An FHA loan is a type of mortgage loan that is insured by the US Federal Housing Administration, offering an option with more flexible qualification measures. For homebuyers with a credit score above 620, this is a viable and common option.

720 To Perfect: Under 800 And Still In Great Shape

The median credit score in the United States is 723, the average credit score for the Dallas-Ft. Worth area is 648, and anything above 720 is placed with the marker of “excellent credit.” Therefore, just because you may range just slightly above 720, which may feel miles away from a perfect 800, you’re likely in just as good of shape when it comes to getting approved for a mortgage. You can expect a mortgage approval with good interest rates if you have a credit score higher than Plano Home Loan620.

Keeping an eye on your credit rating and understanding the measures that are used in determining your credit score will certainly help you maintain a good score. Of course, speaking with a professional and receiving expert advice is always recommended. For specified information on your particular situation, contact your mortgage professional to discuss your options for receiving a mortgage loan.

Resources

Bump up your credit score in a hurry

FICO® credit scores & your Mortgage

What Is a Good Credit Score for Buying a House?

Check Your Credit Score & Report Before Buying a Home

What’s the Lowest Credit Score I Can Have and Still Get a

The Credit Scores That Will Cost You When You Apply

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