Profile picture for staceyq

What is the minimum credit score that lenders will accept?

I was recommended a credit repair company by my lender to improve my credit score. My lender initially said that my credit score was satisfactory, then later said that I needed to increase it by 20 points. What is the minimum score to be eligible for an FHA and/or conventional loan? And how do I know if this credit repair company is reputable?
  • July 19 2011 - Madison
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Answers (6)

Profile picture for Michael Helton

Technically, 620.  Lenders might modify this a bit to fit their own rules/risk.  Here is a link the Fair isaacs, who are the company who does the FICO scores.  :

http://www.myfico.com/LoanCenter/Refinance/Step1/GetTheScores.aspx

  • July 19 2011
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Profile picture for Michael Helton
As far as credit repair, those are usually scams.  Well, technically they are not scams since they do provide you information for a fee.  However, that info may be found for free and you end up doing the work yourself anyway.

Goto Myfico.com or the FTC website for info on getting your free credit report from Experian/transunion/Equifax.
http://www.ftc.gov/bcp/ed ... re34.shtm

Or, if you want a step-by-step approach go to the library and get a book.  Suze Orman is pretty good for beginners.
  • July 19 2011
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Every place can put there own restrictions as was said.  At my bank it is 620 but I can look to go lower with a strong file.

As far as trusting a credit repair place that is a good question.  I would say if you trust your lender it would be ok to trust them because they would not want to steer you wrong or they would not get the loan.
  • July 19 2011
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Profile picture for petrathomas
Stacey, a lot of lenders just raised their credit score requirement from 620 to 640 for FHA and conventional. If you're looking in an area where USDA financing is available, you can possible buy with a 600 or 620 score.
  • July 19 2011
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Most lenders need a 620 or 640.  We'll go down to a 580.  Feel free to click on my name and contact me.  Glad to take a look. 
  • July 19 2011
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Lenders usually buy other proprietary FICO scores: Industry Option FICO scores, which give added weight to how you've handled past car loans; NextGen FICO scores, which are used to qualify subprime customers and weed out potentially bad accounts; FICO Expansion scores, which use non-credit-bureau data to rate people with no credit history; and specific models for credit-card issuers and finance companies. The scoring scales for those other models, as much as 150 to 950, are wider than the basic FICO range of 300 to 850.
In fact, the requirements vary depending on the lender and the terms are usually different. Some lenders provide loans even for people with less-than-perfect credit score, however, the interest rates are higher.
Actually, now it is rather difficult to get a loan due to the financial reform that makes the requirements tighter. [Hotlink and self promotional section removed by Zillow moderator. Please see our Good Neighbor Policy for more information.] even to consumers with bad credit.
  • July 19 2011
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