October 26, 2021

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FHA Loan Reader Question: Checking Credit Scores

A reader asks, “I did have bad credit at one time but I would say I have good credit now. I found out I had 2 things against me but I have taken care of them, they were small amounts but they would be the only thing against me over the past 5 years. I have paid off a car that I paid for over 5 years and also several small loans.”

“I am buying a mobile home through the owner but I want to build a house on some property that I own and I am not sure about my credit score and wanted to know if there is any way of finding out if I would be eligible for an FHA loan without applying for the loan and having my credit checked. I heard that if your credit is checked that it will go against your credit score. What should I do?”

Ask any home loan or credit counselor about how to prepare for an FHA loan application and you’ll get the same advice–all borrowers should request copies of their credit reports and examine the details carefully. Borrowers can do this in several ways–one is to request your credit report from each of the three major credit reporting agencies (Equifax, Experian, and TransUnion). Another is to make the request via a third party company such as GoFreeCredit.

No matter which way you choose to obtain your credit information, it’s important to study the credit report for both your credit score–most lenders require a minimum of at least 620 or higher for an FHA mortgage loan–and your credit record.

Studying your credit record is crucial for several reasons, one of the most important being that you want to insure you have no erroneous or outdated information in your report. Studying your credit report is also a good way to detect signs that you’ve been a victim of identity theft–if so, you may have to open a case with the credit agency to fix your record. That takes time and won’t be accomplished in a matter of weeks. That’s why it is best to request your credit information at least a year in advance of applying for an FHA mortgage.

Knowing what is on your credit report is important regardless of whether you want to buy a new home or not–many borrowers find added peace of mind knowing exactly what’s on their credit reports as they work to gain or maintain a good credit rating.

Joe Wallace - Staff Writer

By Joe Wallace

June 28, 2012

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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