One of the more frequent questions I am asked is “what is the minimum credit score that I have to have to get an FHA loan?” and the answer I usually give is more confusing than just a simple number.
Officially, FHA doesn’t have a minimum credit score requirement.
But just because FHA doesn’t have a minimum credit score requirement, doesn’t mean that you can get an FHA loan with a bad credit score — because the key is that many (or all) lenders now require a minimum credit score before they will issue an FHA insured loan to you.
And in general – the lenders are generally moving to a 640 mid credit score (you have 3) before they will loan you money (assuming you meet the other criteria). True, some are still at 62o, but the trend has been for more and more lenders to move toward the 640 minimum threshold lately.
And for the last couple of years, as guidelines have been tightening – the minimum credit score requirement for most lenders has went from no credit score requirement to 580 to 620 and now 640.
Will it continue to rise?
I doubt it — but maybe. 3 years ago, anyone with a 680 or higher credit score was considered an “A paper borrower” and maybe it will go that high — but I just don’t see it happening.
But I have been wrong – which means if you have a 642 credit score right now and are considering refinancing or buying a house with an FHA insured loan – it might be wise to act now rather than wait.
Because it is possible that your 642 credit score won’t be good enough in the near future.
