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We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover.

How We Make Money

The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: MoMo Productions/Getty Images February 25, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Ruben Çağınalp is an associate writer for Bankrate, focusing on mortgage topics. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Kenneth Chavis IV is a senior wealth manager who provides comprehensive financial planning, investment management and tax planning services to business owners, equity compensated executives, engineers, medical doctors and entertainers. Bankrate logo

The Bankrate promise

At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo

The Bankrate promise

Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner. Bankrate logo

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Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.

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We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.

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Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo

How we make money

You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. Your can have an impact not only on your ability to get a mortgage, but also on the loan’s rate and terms. Mortgage lenders consider your score, alongside other factors like employment, income and debt, to determine whether you can realistically afford the home you want. While some mortgage programs open the door for those with lower credit scores, a higher score means you won’t be burdened with higher costs, so the better your score, the cheaper your mortgage overall.

Mortgage and credit score statistics

786 is the median credit score in the U.S. for those taking out a mortgage, according to Q2 2021 Federal Reserve Bank of New York . Minnesota, New Hampshire and Vermont are home to those with the highest average credit scores in the country, while Mississippi, Louisiana and Alabama are home to those with the lowest, VantageScore . The average mortgage debt is $229,242, according to 2021 from Experian. Generation X borrowers have the highest average mortgage debt, at $259,100.

Credit score to buy a house

Some types of mortgages have specific minimum credit score requirements. A conventional loan requires a credit score of at least 620, but it’s ideal to have a score of 740 or above, which could allow you to make a lower down payment, get a more attractive interest rate and save on private mortgage insurance. An FHA loan can be had with a credit score as low as 580 or 500, depending on down payment amount. That said, taking out an FHA loan with a very low credit score can still be a challenge, since lenders can impose their own higher credit minimums. The U.S. Department of Veterans Affairs (VA) doesn’t set credit minimums for VA loans, but many VA lenders have their own credit requirements, typically in the low- to mid-600s. Similarly, USDA loans don’t have a credit score requirement by U.S. Department of Agriculture standards, but you should still be prepared to meet the minimum set by lenders, usually 640. Type of loan Minimum credit score Conventional 620 FHA 580 VA No requirement, but generally low- to mid-600s USDA No requirement, but generally 640

Average credit score by state

The credit health of Americans varies across states. Minnesota has the highest average credit score, 724, followed by New Hampshire (720) and Vermont (719), according to VantageScore data from December 2021. Mississippi (660), Louisiana (668) and Alabama (670) have the lowest average scores. The Northeast and Pacific Northwest tend to have higher credit scores overall, while the Deep South has some of the lowest scores.

Average mortgage debt by age group

Americans typically begin borrowing in young adulthood as they face major expenses like housing and education at a lower income level. They tend to borrow at a slower pace in middle age as incomes rise. As they age, Americans start deleveraging as they pay off their loans. Source: Experian State of Credit Report, 2021 Generation Average credit score Average mortgage debt Silent Generation 729 $163,254 Baby boomers 724 $198,203 Generation X 685 $259,100 Millennials 667 $255,527 Generation Z 660 $192,276

Credit scores and mortgage rates

Generally, the higher your credit score, the lower your mortgage rate and less you’ll pay on a monthly basis and in interest overall. Depending on your credit, a 30-year fixed-rate mortgage for $286,400 could cost you: APRs as of Feb. 2021
Source: Credit score APR Monthly mortgage payment Interest total 760-850 3.6% $1,302 $182,358 700-759 3.822% $1,338 $195,313 680-699 3.999% $1,367 $205,775 660-679 4.213% $1,403 $218,579 640-659 4.643% $1,476 $244,810 620-639 5.189% $1,571 $279,055

What else do mortgage lenders consider

Along with credit history and score, mortgage lenders take into account your: Employment history and income – Lenders want to see that you have a reliable source of income and a paper trail to prove it. Two or more years at the same company is a plus, and be prepared to provide tax returns from the last two years, as well. Down payment – A larger can help you get approved and obtain a more favorable interest rate, but be careful not to eat into your emergency savings. Debt-to-income (DTI) ratio – Lenders use your as a critical measure of an affordable monthly mortgage payment. A DTI ratio that’s too high could limit your options, even if you have good credit and stable income. Assets – You could be a more attractive borrower overall if you have substantial savings and other assets like investment or retirement accounts.

Bottom line

A mortgage is one of the biggest financial commitments you’ll ever make, and will follow you for years to come — even older borrowers still typically shoulder six-figure debt. In preparation for your finances to be scrutinized, it’s crucial to improve or maintain your credit score so you get the best possible mortgage rate and terms.

Learn more

SHARE: Ruben Çağınalp is an associate writer for Bankrate, focusing on mortgage topics. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Kenneth Chavis IV is a senior wealth manager who provides comprehensive financial planning, investment management and tax planning services to business owners, equity compensated executives, engineers, medical doctors and entertainers.

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