If you have bad credit history and are looking to get a home mortgage loan, then chances are you are going to need to know all about how the FICO credit scoring system works.
FICO – Fair ISAAC & Company – is the leading credit reporting agency that lenders turn to when it comes time to credit scoring your home loan mortgage application; so if you do have bad credit history, these guys will know.
1. The higher your FICO score, the better chance you have of getting that home mortgage loan. Also, the higher your score, the more room you have to negotiate a lower interest rate.
2. If you have a FICO score lower than 500, normally there is very little chance you’ll be getting a mortgage home loan.That said, if you have a score of:
500 – 600 you should be able to get a home mortgage loan, provided you are willing to make a down payment.
Click here for a loan options with a 500-600 credit score.
600 – 640 You should get a 100% home loan financing. Thats right, with no money down.
Click here for a loan options with a 600-640 credit score.
640 - 700 You should be able to be approved for a 125% home mortgage loan. 700+ You’re in the drivers seat! You should be able to get an excellent rate with excellent terms.
Click here for a loan options with a 640-700 credit score.
3. FICO depends on each credit report, so before you apply for a home mortgage loan, if you have bad credit history, get a copy of your credit report and make sure there is nothing on there that shouldn’t be there. If there is, get it changed before you apply for the home mortgage loan.
4. Wait until after you have purchased or refinanced your home before you buy anything additional on credit. More loans or higher balances can have a dramatic effect on your mortgage approval, regardless of whether or not you had over a 600 FICO score before you bought on credit.
Been turned down? Let us match you with lenders in your area who can find loans for any credit score. Click Here.
5. Remember, the FICO score is only a part of your home mortgage loan application, so if at first you don’t succeed in getting your home loan mortgage, don’t give up. Some lenders may still be willing to lend to you!
People with bad credit often don't understand how the credit scoring system works. It is beneficial to find out more about it when looking to get a home loan with less than perfect credit to bad credit or when dealing with sub prime mortgage lenders.
To view our list Recommended Bad Credit Mortgage Lenders