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In Market for Mortgage? Note Credit Scores You’re Up Against

January 25th, 2013 · No Comments · Mortgages

Meredith Simonds

by Meredith Simonds

As you know, lenders are especially discriminating these days in the wake of the recession fueled by the housing crisis. So, if you’re in the market for a mortgage, it’s natural to wonder what kind of credit scores you’re competing against. As reported by CNBC, MortgageMarvel.com answers that question in a report revealing the average and median credit scores of 500,000 mortgage applicants across the country.

The big reveal? The average credit score among mortgage applicants is 734; the median, 754.

Beyond the national average, the report goes on to break down the average and median credit scores by state. On the median side of things, California, Hawaii, Oregon, Wisconsin and Connecticut rank in the top five; Alaska, Oklahoma, Louisiana, Mississippi and Arkansas in the bottom five.

Though there are certainly some notable exceptions, in general, the higher a state ranks for personal income, the higher the credit scores of its mortgage applicants. Now, keep in mind that we are not speaking in terms of the states’ overall credit score averages or medians, but only of those who are applying for mortgages. That’s an important distinction, as evidently people with lower credit scores often don’t even bother applying for mortgage loans at all.

So, if your credit score is on the low end of things — and you’re looking to buy a home now, or may be in the future — this news reinforces the importance of making every effort to get your score as high as possible. If you already have good credit, this may simply mean improving your credit utilization ratio by paying your balances down to zero every month, or taking out another line of credit (which you use but pay down to zero every month). Or, if you have bad credit, the credit repair process is key, starting with review and analysis of all the negative listings on your reports, and the all-important debt validation process.

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