In the aftermath of the housing crisis, lenders have become more stringent, requiring borrowers to make larger down payments and possess a higher credit score. But what is considered a high credit score when it comes to obtaining a mortgage?
MortgageMarvel.com reviewed more than 450,000 online mortgage applications made in 2012 to find the average credit score of applicants nationwide and for each state. Nationally, the average score of mortgage applicants increased by 4 points to 734 since 2011. The highest credit score a person can obtain is 850, and the average score of the total population, as of Nov. 30, is 664, according to FICO.
Among states, California mortgage applicants had the highest average credit score, 755, for the third year in a row. Mississippi mortgage applicants had the lowest at 689. (Remember, mortgage applicants have higher credit scores than the overall population of applicants and nonapplicants.)
Though Mississippi's average of 689 is still considered a solid credit score, borrowers with a lower score can often still obtain a Veterans Affairs or Federal Housing Administration loan. Standards aren't as strict for mortgages guaranteed by the VA and FHA. Lenders look at a many variables along with credit score when approving a mortgage, including income, length of time in a job, total assets and even the local real estate market.
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