Your Credit Score and FHA Mortgages
One of the most amazing benefits of an FHA mortgage is that a minimum credit score is not required.
The most important facet of qualifying for an FHA mortgage is to demonstrate the ability of paying the mortgage back and on-time.
Generally, we like to see (2) two active tradelines on your credit report marked "Paid as Agreed". In the event you do not have two (2) active tradelines, we can use substitute payment history records like utilities, cell phone bills, and other recurring monthly payments.
A few mistakes on your credit report will not disqualify you from an FHA mortgage. FHA underwriters focus more on your general pay history rather than a few isolated instances. Also, a letter of explanation also helps shed light on your bumpy credit past.
Although a minimum credit score is not required, there are some advantages to a stronger FICO:
- If your FICO score is above 550, your file can go through an automatic approval system to have your mortgage fund faster.
- With a stronger FICO score, it might help offset a higher debt-to-income ratio or bumpy employment history to help get the approval.
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