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Credit Score Needed to Buy a House in Washington State



What is the required or minimum credit score to buy a house in Washington State? That depends. Mortgage lenders each have their own standards, and different loan programs have different credit requirements. This article will go over the credit score needed to buy a Washington home.


In This Article

  • Why Credit Scores Matter for Mortgage Applicants

  • How to Boost Your Numbers

  • Buying a Home in Washington State

  • Bottom Line

  • Want to Get Pre-Approved?


When you buy a home, your first step should be getting pre-approved for a mortgage. Your mortgage lender will pull your credit and look at your credit score as part of the preapproval process. The higher your credit score is, the better your chances are of getting pre-approved.

During the mortgage approval process, lenders assess credit scores to determine a borrower's creditworthiness and whether they qualify for a loan. And if you are currently in the market to purchase a home, you may wonder what score is needed to get you approved for a loan and into your dream home.


Conventional lenders typically look for a FICO score of 600 or higher. According to research by Bankrate, the best interest rates are reserved for borrowers with the best credit scores. You might be able to qualify for a mortgage loan with a score below 600; however, you will likely pay a very high-interest rate. That said, a score of 600 or higher is a pretty good starting point if you want to buy a home in Washington state.


Why Credit Scores Matter for Mortgage Applicants


Your credit score is a number that represents how good of a risk you are for a lender. Your credit report shows how well you manage your finances, including how you handle debt. Since your credit score will ultimately be used as an indicator to see if you will be able to manage your future mortgage payments, it literally pays to keep yours high.


How to Boost Your Numbers


Boosting your numbers to reach a higher credit score will give you more options and better terms when applying for a mortgage, especially when lending is somewhat tight like it is right now.

If your credit score is currently too low to buy a home in Washington State, you might be wondering what to do next. Remember, you are not powerless in this situation, and there are certain steps you can take to improve your credit score.


5 factors that influence your score

As you can see from the pie chart, credit scores are broken into several components including, payment history and amounts owed. Payment history holds the most weight in this portion of your credit score. In this instance, your “payment history” accounts for 35% of your credit score under the FICO scoring model. That is more than any other single factor. As a result, late and missed payments can seriously lower your score. To avoid this outcome, all you need to do is pay those bills on time. Pro Tip: Setting up payment reminders and enrolling in automatic bill payments are two ways to keep up with your bills.


Next and almost equally important, “amounts owed” accounts for about 30 percent of your credit score. Here, if you have multiple credit cards or loans, the first step is to make sure you pay all of your bills on time going forward. You should also make it a point to pay particular attention to the things that show up on your credit report when deciding what to pay down first.


Likewise, according to myFICO.com (which is owned by the company that actually created the FICO scoring system), reducing the amount of debt you owe can potentially improve your score. Of course, it is also important to focus on the remaining three factors—the length of credit history, new credit, and the type of credit used. You can accomplish this by doing the following:


  • Request copies of your credit report from all three bureaus and check for errors - if you find a mistake on your credit report, act quickly to correct it.

  • Avoid applying for new credit - new credit is a red flag for lenders, and applications for new credit are one of the top reasons for credit scores to drop.

  • Don't close old accounts - closing old accounts can hurt yo more than you think. Every time you close an account, your credit score drops one point.

  • Shop for mortgage rates within a 30-day period - too many spread-out inquiries can lower your score.

  • Work with a credit counselor or a lender to improve your score.


Buying a Home in Washington State


In Washington State, many local mortgage lenders use the FICO credit score that ranges from 300 to 850, and they tend to look more favorably on scores above 600. That said, many lenders are developing their own decision-making engines that look beyond this kind of score when making loan approvals. Note: your credit score and your FICO score are basically referring to the same thing. A FICO® credit score is a type of credit scoring model used by many lenders. While different reporting agencies may weigh factors slightly differently, they are all essentially measuring the same thing: your ability to manage your credit responsibly.

It is easy to see this data and fear that you may not be able to qualify for a mortgage when you shouldn’t. There is more to qualifying for a mortgage than just the credit score, as mortgage companies tend to look at the big picture when reviewing loan applicants, reviewing your income stability and cash reserves as part of the larger equation.


There are also other options available that allow people with lower credit scores to buy their dream home, and there is no single cutoff point for credit scores across the industry. Since this can vary from one mortgage company to the next, it’s worth your while to apply for preapproval today and learn where you stand.


To learn more about FICO credit scores and how they work, visit www.myfico.com.


View Washington State Mortgage Rates Oct, 12, Tue, 2021


Bottom Line

Credit scores are just one part of the mortgage preapproval process, and you shouldn’t let assumptions about whether your credit score is strong enough put a premature end to your homeownership goals. Let’s connect today to discuss the options that are best for you.


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Want to Get Pre-Approved?

Are you planning to buy a home in Washington State and need a mortgage loan to make it happen? We can help. SMC has been serving borrowers in Washington, Oregon, Colorado, and Idaho for about 28 years. Our loan experts can review your credit score, income, and other financial factors to determine if you are a good candidate for a home loan and can review all our mor

tgage programs. We can even pre-approve you before you start shopping for a home to make you a more competitive home buyer.


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