Credit Scores for Home Buyers in 2011

credit scores for home buying in 2011 Consumer lending is still tight, and your credit score will still be a major factor in 2011 if you want to get the best mortgage interest rates. Even if you don't have a top score, you may still be able to get a government-backed loan, such as an FHA, VA or USDA, at a decent rate.

To get the best rate on the market, you'll need to have a FICO credit score of at least 760. But if your credit score is between 700 and 759, your interest rate will be just 0.2 percent higher. That means your mortgage payment on a $200,000 loan will be about $20 more per month. You'll pay about $10,000 more over the life of the loan on a 30-year fixed-rate mortgage at about 5.06 percent. The lowest interest rate for top scorers is 4.86 percent this week.

If your credit score is between 680 and 699, you can still probably find a bank that will consider you for a mortgage, but you may be able to find a better rate by applying for an FHA, VA or USDA loan. Your best best is to work with an independent mortgage broker who is not tied to a particular bank; that way the broker can find you the bank that will offer you the best deal depending on your credit score.

If your credit score is as low as 620, you may still be able to find a lender that will offer you a government-backed loan, but you'll have to do some searching. Most banks will only offer an FHA, VA or USDA loan to people with credit scores of at least 640, but some smaller banks will consider applications at 620.

Even though FHA's official rule is that you can qualify for a 3.5 percent down mortgage with a credit score as low as 580, banks are not offering mortgages to people with credit scores that low. If your credit score is below 620 you'll need to work on increasing your score first, as well as save more cash. If you're able to put down more than 20 percent, you may be able to find a bank that will offer you a mortgage.

So what should you do to improve your credit before applying for a mortgage?

Know Your Credit Score:
There's no better time to get your credit score!

Get It Now: See Your 2011 Credit Score

Step 1: Check your credit report.

Your first step should be to get your credit reports from all three credit bureaus (Equifax, Experian and Transunion). You can order them for free at the government-run website Annual Credit This is the only website that offers free credit reports with no strings. (Other sites might offer you a free credit report but require you to sign up for monthly services.)

Step 2: Challenge any errors on your report.

When you get your report, if you see any errors follow the instructions sent with the report for correcting errors. The credit reporting agency has 60 days to respond to you and will send a corrected report. If it's still not correct, be persistent and send another letter disputing the report. You may find you need to dispute reports several times before they are correct, but it's worth the effort to improve your score.

Step 3: Reduce credit card debt.

If you're carrying large balances on your credit cards, pay them down. To get the best credit score you need a credit utilization ratio of 10 percent to 20 percent. You can calculate the ratio by dividing your total outstanding debt by your total available credit. For example if you have $2,000 of total debt on two credits cards that each has a $5,000 credit limit, your credit ratio would be 20 percent (2,000/10,000).

Step 4: Monitor your credit score.

While you're working through the process of correcting your credit reports and paying down your debt, you can check what's happening to your score for free at

Step 5: Order your credit scores.

Once your report is accurate, you've paid down your debt and you think you're ready to apply for a mortgage, order your credit scores at That way you will see what your potential lenders see. if your score is over 640, most banks will approve a VA or FHA loan. If it's below 640, you'll need the help of a specialized broker. If your score is over 680 you'll be able to consider both government-backed loans and private loans. Look at the numbers and see which one makes the most financial sense given your situation.

If your scores are too low, you may want to see if a parent or other family member will sign as nonoccupant co-signer. If you do plan to work with a co-signer, be sure to inform the broker that up front so he can steer you to the lenders that will approve a loan with a co-signer.

Your Credit Score Can Cost or Save You Thousands.
Know Where You Stand. Get Your 2011 Credit Score

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And, of course, the sheeple have not lined up to complain, along with us, and, neither have the thought police, put down their donuts long enough to look into, these fraudulently named "Credit Bureaus," but, you just watch the glassy eyed losers, praise BURROck, the jackass in the grovel office, as they pour a billion dollars, into his drawers, for, his second coming. Damn, it's hard to be an American, among all these sheeple. Edgrrr...

May 26 2011 at 1:08 AM Report abuse rate up rate down Reply
Maurice R Portnoy

Edgar Longenecker
You are absolutely correct in your comments and assertions.
Those 3 so called "Credit Bureaus" should be regulated once and for all by the Commerce Department,because they are out of control.They are causing to loose Billions of dollars to individuals in total with their misguided SYSTEMS of determining SCORES.A Mickey Mouse aproach to determine the credit worhtiness of an individual.Proof of that are the numerous complaints and Law Suits against them, which the media and the Government are ignoring.
The Banks know this very well, but they turn a blind eye, they use those Credit Reports with lower scores so they can charge more interest on granting mortgages.
Proof of all muy comments above.
I own numerous rental properties,three quarters of them are unencumbered
I only have two mortgages, one in my present home the other in my previous home which is very expensive and cannot be sold without loosing hundreds of thousands of dollars, so I rented it for 4,500 which covers the mortgage and other expenses and part of the property tax and insurance
I bought my present home a year ago, and I spent 180,000 dollars on fixing up my previous home for renting it, and upgrading (wood flors, leaded glass doors and windows paint etc,in my present home.
Of that amount I used half or $90,000 in several credit cards.
All 3 CREDIT BUREAUS lowered mi credit score to 620 from 780.
Quote A)"Too many credit cards" B) Too many high Balances".
I am an Egineer with 60 years of experience building industrial plants all over the world, formerly an executive with the largest industrial chemical Co. in the world, the last 25 years I own my own Industrial Corporations with a net worth of 8 low figures,and I pay income taxes in the high 5 figures plus another 5 low figures of state and industrial taxes.When I wanted to refinance my new home high interest rate I found out to my surprise my lowered score. SO Y IMMEDIATELY PAID OFF ALL MY OTSTANDIG CREDIT CARDS BALANCES, the $ 90,000.It is an insult because they do not have my financial statments nor my income taxes reports, they do not know my income.However the Banks on applying for refinance have all that documentation, but....they want to ignore it and go by those miserable inept Credit Bureaus reports, which are miningless in many cases.So unless they work with real financial data, and not MERE ASSUMPTIONS, they should NOT BE ALLOWED TO OPERATE, or their information should not be allowed to be used to grade credit worthines.
Tho add insult to injury Government Institutions also use those misguided SCORES.
They work togheter like a Monopoly,they have separate offices including overseas,but they use the same information and criteria to qualify the so called SCORES.Dun and Brandstreet is an example of correct information althoug they are commercial, but they work with financial statments not assumptions.

January 21 2011 at 3:25 AM Report abuse rate up rate down Reply
Richard Schennberg

Veterans can actually do OK with a low credit score under some conditions: no recent defaults, late payments (6 months), short sale (3 years), foreclosure or bankruptcy (several years), there is no credit scoring whatsoever. VA loans should be at the bank's best interest rate. Check the most recent rules and don't let anyone charge you higher interest for a low credit score if you are VA loan eligible.

January 21 2011 at 12:09 AM Report abuse rate up rate down Reply
Edgar Longenecker

Who runs this selfserving website, if not, the same corporate fascists, which controls this nations commerce ? We call that racketeering, a RICO, crime...

January 20 2011 at 11:43 PM Report abuse rate up rate down Reply
Edgar Longenecker

Who died and left these credit nazis, to be boss; whatwith their scam, of disseminating, "information, not deemed to be correct;" as if, their lies are gospel ? Case in point: They bandy about the slander: "Alias,', which we all know to be a ruse with which to hide ones' identify, so, let me tell you about the aliases these morons, labled me with. Edgar Raymond is one, and two: Edgar Raymond Longenecker, is another, because; alias one, they're too damned stupid to read my drivers' license secod line, last name; since it's too long to fit in one short space... and two: because these morons, claim my actual name is Longnecker; considering that the Nobel laureates, don't think, I know how to spell my own name; which they claim, is, an alias... Maybe this is why the crooks, get away with the disclaimer; "Information not deemed to be correct," and "the customer is not to be shown the report," which, is not a credit report at all, but, is no more than an extortionary way to get you to pay , a disputed bill, withou, being sued in a court of law; not, in their office; without regard for your end of any dispute; and, without regard for all the bills and mortgages you actually, do pay. What gives these three parasitic corporate leeches, control over Americas' entire credit system,
and, the right to destroy anyones' credit, with secret communication, not deemed to be correct? why, because you exercised the contractual option to pay a late charge, instead of "on time;" even though, with a late charge, you have bought the right to do so ? And, in re "aliases, who are the actual parasites, hiding behind corporate anonymity, to, monopolize, Americas' commerce; Bin Laden, sitting in a cave ? Where's the United States Attorney General; maybe, he owns stock in these corporate fascists...??? What happened to "Fair business practices, and the allegedly, "Better, business Bureau, as if, the alias: "Bureau," makes them a department of the government? Edgar.Raymond.Longenecker. III... the only prima facie/in your face, "Alias,"
I need; the one I was born with; notwithstanding the govern mental Corporate Capital letter title sleazed into all of our Slave status, birth certificate, contractual nexus to the fascist state; notwithstanding the illegality of unrevealed, lopsided, onesided, unconscionable, contracts ...Let's hear who owns these socalled credit bureaus; considering the revelation, that: "An agency of the government, is not, the government, nor, a department, thereof.... Edgrrr... if you must have an alias...


January 20 2011 at 11:29 PM Report abuse rate up rate down Reply
Scott Rose Legends in Stone

That was a very good article. I have just been approved on an FHA home loan and the whole process is exactly how this article just explained it, it is all in the numbers when it comes to getting your loan approved. Best way is to get your credit card dept down to about half of what the total amount of credit that you have available, after you have been approved for the loan and your home goes through escrow then the keys are in your hand and it yours and now you can use the money left on your credit cards to improve the residence you just purchased and make it twice as valable as it was when you first bought it and you just made yourself a sizable amount of equidty and you could refinace and pay off your credit cards and just end up with a small monthly mortgage payment. It works.

January 20 2011 at 10:39 PM Report abuse rate up rate down Reply

Save up your money and you might just be able to get it sooner than you think. There is a great article about mistakes home sellers make, HtTp://bIt.Ly/SavingArticles check it out!

January 20 2011 at 9:00 PM Report abuse rate up rate down Reply

Wait another year and that same house will be ten to twenty percent less in price, offsetting any increase in mortgage interest. If you make just one extra payment per year, you will pay off a thirty year mortgage in 21 years and cut the amount of interest you pay over the life of the loan.

January 20 2011 at 8:35 PM Report abuse rate up rate down Reply
1 reply to liguy's comment

I'm in big trouble with my mortgage. Http:// Just don't think I'll be able to pull it off.

January 20 2011 at 10:23 PM Report abuse rate up rate down Reply

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