What Credit Score Do You Need To Buy A House in Seattle, WA?

Getting qualified to buy a house can be tricky. Plan ahead to prepare for your home purchase in the future!

There are many misconceptions about the credit score needed to buy a house. Recently, it was reported that 24% of renters believe they need a 780-800 credit score to be considered ready to buy a house in Seattle, WA. This isn’t necessarily true!

Only 25% of the Americans have a FICO® Score between 740 and 800. Here is the breakdown according to the Experian Credit Bureau.

Americans’ Credit Scores:

Credit Score Seattle Home Buyers — Part of a Home Buying Plan is learning about your credit score so you can get qualified to buy the home you want.

16% Very Poor (300-579)
18% Fair (580-669)
21% Good (670-739)
25% Very Good (740-799)
20% Exceptional (800-850)

Randy Hopper, Senior Vice President of Mortgage Lending for Navy Federal Credit Union said,

“Just because you have a low credit score doesn’t mean you can’t purchase a home. There are a lot of options out there for consumers with low FICO® scores,”

There are many programs available with low or no credit score requirement. There are also home buying assistance programs here in Washington State that will let you buy a home with a low downpayment, and may even grant you some of the funds to get started. The Federal Housing Administration (FHA) now requires a minimum FICO® score of 580 if you want to qualify for the low down payment advantage. The US Department of Agriculture (USDA) does not set a minimum credit score requirement, but most lenders require a score of at least 640. Veterans Affairs (VA) loans have no credit score requirement. Click here to learn more about VA Loan options in the Seattle area.

As you can see, none of these programs require a stellar “700” credit score!

It is true that the average FICO® score for all closed loans in January was 726, but there are plenty of people taking advantage of the low credit score requirements. This graph depicts the average FICO® Score of closed FHA Loans since April 2012 according to Ellie Mae:

What Credit Score Do You Need To Buy A House? | MyKCM

As you can see, average credit scores of borrowers using the FHA Loan Program has been dropping for the last seven years. As a matter of fact, the average FHA Purchaser (reported in January 2019) had a FICO score of only 675!

One of the challenges many would-be home owners in Seattle face is that they are unsure about what their credit score actually is. They just assume that it is too low to qualify and do not double check! The website, Credit.com confirmed that only 57% of individuals sought out their credit score at least once last year.

Credit Bureau FICO® reported:

“Since October 2009, the average year-over-year FICO® Score has steadily and consistently increased, from a low of 686 in 2009 to the latest high of 704 as of 2018.”

Here is the increase in the average USA FICO® Score over the same period of time as the graph above.

Bottom Line

At least 84% of Americans have a credit score that will allow them to buy a house. If you are unsure what your score is or would like to improve your score in order to become a homeowner, let’s get together to help you set a path to reach your dream!