You’ve probably heard that you need a good credit score to refinance a house. But just how good? We’ll explore what credit score is needed to refinance a house so you can make the best decision for your situation.
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There is no single answer to the question, “What credit score is needed to refinance a house?” since it can vary depending on the lender and other factors. However, in general, you will need a good credit score to qualify for a home loan. This means having a FICO score of at least 620. If your score is below this, you may still be able to refinance your home, but you may have to pay a higher interest rate.
What Is a Good Credit Score To Refinance A House?
The “good” range for credit scores begins at 690 and extends to 719, which is considered excellent. If you have a credit score in this range, you will likely be approved for a loan with favorable terms, including a lower interest rate and smaller down payment requirements. A credit score of 720 or higher is considered excellent, and you should have little trouble qualifying for the best terms on a mortgage loan.
How to Improve Your Credit Score Before Refinancing
If you’re thinking about refinancing your house, now is a good time to start working on improving your credit score. A higher credit score will get you a better interest rate, and that can save you a lot of money over the life of your loan. Here are some things you can do to start boosting your score:
1. Check Your Credit Report for Errors
The first step is to check your credit report for any errors. If there are any inaccuracies, dispute them with the credit bureau.
2. Make all Your Payments on Time
One of the biggest factors in your credit score is your payment history. So, make sure you’re always making your payments on time.
3. Use a Credit Tracking Service
Another good way to keep tabs on your credit score is to use a credit tracking service. This will help you identify any potential issues early so you can address them before they impact your score too much.
4. Keep Your Credit Utilization Low
Your credit utilization ratio is the amount of debt you have compared to the amount of available credit you have. It’s a good idea to keep this ratio below 30%, and even better if you can keep it below 10%.
The Bottom Line
If you’re considering refinancing your home, your first step should be to check your credit score. Your credit score is a key factor in whether or not you can qualify for a refinance, and getting a lower interest rate.
There is no magic number for what credit score is needed to refinance a house, but there are some general guidelines. For most refinancing programs, you’ll need a credit score of 620 or higher. However, there are some programs that allow you to refinance with a lower credit score.
If you’re not sure what credit score you need to qualify for a refinance, contact different lenders and ask them what their requirements are. They’ll be able to give you more specific information based on their own guidelines.