Credit Score FAQ's

May 9, 2019
Author: New England Home Mortgage

You need to have at least decent credit to buy a home. Even though might be able to secure a home loan, you will pay more in other ways.


The FHA credit requirements are 580 or higher to qualify for a loan with 3.5% down payment. If you have a credit score below 580, you will have to pay at least 10% for a down payment. Conventional loans require a credit score a bit higher - typically between 620 and 640. No matter what type of mortgage loan you get, the higher your credit score, the lower the interest rate you can get on your loan.


Below, we answer three of the questions we get asked the most about credit scores.


What makes up a Credit Score?

Five factors determine a credit score. These include:

  • Payment history. Payment history makes up 35% of your credit score because creditors want to know that you are responsible enough to make your payments on time.
  • Credit utilization. Credit utilization includes how much you owe overall, how many debts you have, and how much you owe to each individual account. This makes up 30% of your score.
  • Length of credit history. Creditors want to see a long history of responsible credit. The longer you have been making payments and managing debt, the better. For those who have just started building credit, don’t worry, this is only accounts for 15% of your score.
  • Credit mix. Accounting for 10% of your score, a credit mix of a variety of debt helps to raise your score (i.e., car loan, credit card, student loan, mortgage loan).
  • New credit. Opening too many lines of credit at once can hurt your score. Do not open new lines of credit if you are under contract until AFTER closing day. This makes up for the final 10% of your credit score.

How can I check my Credit Score?

There are numerous free ways to check your credit score, but Annual Credit Report is authorized by federal law. You can check your credit score for free once every 12 months.

In the case of identity theft or fraud, if you were turned down by a job due to a credit score, or if you are unemployed and plan to start a job within 60 days, you can get a free credit score, even if it has been less than 12 months since last getting a report.

How can I improve my Credit Score?

Start with your payment history, since that has the highest percentage of your score. If you are behind on any debts, it’s time to get caught up as soon as possible and remain up to date with every bill.

If you generally pay your bills on time, but are late once, you can call the creditor and ask for the late payment to be waived. Make sure you explain your history of being on time. Because missing one payment can take 60 to 120 points off of your credit score, it is worth calling and asking.

Finally, make it your goal to pay off debt. If you have credit cards that are almost to the limit, it’s important to lower that debt (remember, debt utilization is 30% of your score). Create a strict budget and commit to paying off as much as you can each month.


Taking control of your credit is the first step toward homeownership. Do you have more questions about credit scores or qualifying for a mortgage? Contact us today!

(860) 736-2747
37 W. Center Street, Suite 208, Factory Square, Southington, CT. 06489