What Are Credit Score Requirements For Mortgages?

Summary

Mortgage lenders pay particularly close attention to your credit score.

Here is what credit score requirements mean, and how you can still get a mortgage.

Credit Score Basics

Your credit report typically lists three different credit scores.

Each of these three credit scores comes from one of the three credit bureaus.

These scores are based on how you have managed your credit lines in the past. These credit lines can include mortgage lenders, credit cards, department store cards, car loans, student loans, and other debts.

Your credit is usually classified as open credit, closed credit, and derogatory credit. The derogatory credit usually contains all the credit lines you were late on or have collections on.

The credit score people usually refer to is the middle of your three credit scores. This is known as a “mid score”.

Credit Score Requirements

Mortgage lenders have different credit score minimums for different loan programs.

The same lender may require a minimum of a 620 credit score on one type of loan but a minimum of 560 on a different loan program.

Credit score requirements may also change based on other factors, such as how much equity you have in a property.

For example, if you want a 100% cash out refinance on a property a lender may require that you have a minimum credit score of 660.. If you want to only cash out to 90% of the value of your property the minimum credit score required may be only 620 for the exact same loan program with the same lender.

Different Lenders

Mortgage lenders differ in their credit score requirements.

Sub prime lenders focus on people with bad or challenging credit. Their credit score requirements are usually much lower than other lenders.