December 2, 2021

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FHA Loan Credit Questions–What Affects Your Chances Besides FICO Scores?


A reader asks a question about FHA credit requirements, and starts out by quoting one of our past replies to a reader question about FHA credit rules. Here’s the quote:

“FICO scores are not the only issue examined on a credit application. To infer that simply by raising FICO scores for the loan application in question, the loan might be approved with the minimum down payment in this case would be misleading–there are many factors that affect your credit worthiness in the eyes of a lender, FICO scores are just one of those factors…..”

The reader asks, “Which factors exactly affect one’s creditworthiness in the eyes of a lender besides FICO scores?”

There are many factors that could affect a lender’s view of an individual borrower’s creditworthiness. Some are known as “compensating factors” such as having substantial cash reserves, making a very large down payment, having investments or other large holdings that could be cashed in if needed.

Another important issue is the borrower’s repayment history. Any borrower who wants to successfully apply for an FHA home loan–or any large line of credit, for that matter–should come to the application process with a least 12 months of on-time payments for ALL of their debts.

Your payment record is a very important part of FHA loan approval, especially when it comes to borrowers who may have lower FICO scores.

Having a strong loan repayment history can help borrowers get access to lower interest rates and more competitive terms than those who might be viewed as a riskier proposition because of a spotty repayment history in the last 12 months. Your on-time payments for one year or more show you to be a responsible bill payer, making you less of a gamble for the lender.

Borrowers who feel they need additional help or advice in this area should call the FHA at 1-800 CALL FHA to request a referral to an FHA approved housing counselor in your area who can help with advice and information about improving credit and becoming a better credit risk at FHA loan application time.

Do you have questions about FHA mortgages? Ask us in the comments section.

Joe Wallace - Staff Writer

By Joe Wallace

September 16, 2013

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 for (8) years and is currently the Associate Editor for

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About 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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