December 2, 2021

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What You Need To Know About FHA Loans And Your FICO Score

Buying a House

FHA home loan approval depends on a number of things–your payment history on your financial obligations, your employment, and your FICO scores.

Credit scores are a big worry for some home loan applicants. Do you have thin credit? Have you had poor credit habits in the past that you are trying to fix? 

Remember, more consumers than you realize have had similar issues in the past–there is no shame in trying to correct your past mistakes and get back on track with your credit.

Too many people feel a sense of shame about their past credit issues–and that shame can prevent people from taking constructive steps to help themselves.

Did you know that you can begin repairing your own credit by making consistent on-time payments and lowering your balances on your credit accounts?

It takes time to realize the gains from doing so, but you CAN improve your FICO scores by doing this and taking other steps toward establishing yourself now as a good credit risk.

Basically, no matter what kind of FHA mortgage loan, FHA cash-out refinance loan, or home improvement loan you want to apply for, credit scores are key and what the lender wants to see on the credit reports of each applicant? 

Those patterns of on-time payment and habits include reducing your credit card balances to well under 50%.

Here are some important facts about your FICO scores and credit report you should keep in mind when you decide to commit to buying a home.

  • Start working on your credit as early as possible for best results.
  • Establish a payment plan that includes as many electronic debts, ACH transfers, or auto-deductions as possible–set the payments for BEFORE the due date for best results as you never know when a bank error, hacking attempt, or some other issue might interfere with the timely transfer of funds.
  • Don’t expect overnight results–your credit report takes time to update and the patterns you are establishing now must be consistent over a longer stretch of time than you might realize.
  • Don’t begin working on your credit without considering a subscription to a credit monitoring service that can alert you if your accounts are hacked, compromised, etc.

If you decide to pay a third party for credit repair services, remember that NO third party can erase true information from your credit report. If you have errors or disputed items on the credit report, that’s one thing–but do not expect accurate information of any kind to be removed by a third-party credit repair agency. 

Credit repair is entirely within the consumer’s ability to achieve using consistent methods of paying on time, every time, lowering your balances, and reducing your overall debt ratio.

Do not trust a third party that promises you specific results or 100% satisfaction guaranteed without having seen your credit report and never trust a third party that promises to remove accurate data–there is no way to do that.

Joe Wallace - Staff Writer

By Joe Wallace

October 26, 2021

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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