Credit Score requirements on New Mortgages are on the Rise in 2009 thanks to tighter underwriting standards and a big jump in refinance activity, the average credit scores associated with getting a new mortgage are rising this year. According to numbers compiled by Inside Mortgage Finance, the average FICO score found on a new mortgage in early 2009 was above 700 – one of the highest levels ever recorded. For new Fannie Mae and Freddie Mac loans, which accounted for roughly 60 percent of all mortgages made in the first quarter of this year, the average FICO score was a whopping 760. This was up from an average FICO of 748 in 4Q08.
Even FHA, which is know for accommodating A minus type credit and has no minimum credit score requirement, reported an average FICO of 694 in February. This is well above the 660-670 level found in the latter part of 2008. The average FICO on a jumbo loan was 738 in the first quarter. This is up from 710 in the fourth quarter of 2008. Current minimum FICO levels are generally 680 or 700 depending on program and other factors. This is up substantially from six months ago when 650 was allowed.
To keep these numbers in context, a person can go from a 780 to a mid to high 600 level with one late payment on a credit card or if they have their credit limits reduced. This is common as the credit card companies have projected they will eliminate 2-3 trillion dollars of available credit on cards over the next year.
