Average Credit Scores for Mortgages Falling
Washington, DC, Oct. 17, 2013 -- There are signs that credit score requirements for home mortgages are loosening somewhat.
The average credit score for mortgage borrowers in September was 732, down from a peak of 750 a year ago, according to Ellie Mae, which provides mortgage lenders with loan origination systems.
That’s also the lowest average credit score since the company started tracking the data in August 2011.
Also, a greater share of borrowers have lower credit scores. Thirty-two percent of mortgages in September went to borrowers with an average FICO credit score of less than 700 compared with 17% a year ago.
Nevertheless, applicants who were turned away in September had an average FICO score of 696. The best FICO score possible is 850.
Borrowers with lower credit scores have to pay more to get a mortgage in the form of points or higher interest rates.