This is how the lender determines how much of a risk you are as they will be deciding on lending you hundreds of thousands of dollars. Your credit score is most often determined by your FICO score, which ranges from 300 - 850. Your FICO score created by the Fair Isaac Corporation is based solely on information in consumer credit reports from the three major national credit reporting agencies.
The higher your FICO score, the lower the risk you are considered to the lender. A score above 580 usually has no problems getting an FHA type financing. Scores of 680 and above usually are eligible for some of the more favorable lending programs. Higher FICO scores result in lower mortgage payments and more savings to you. So keep your score up! Pay all your bills on time and keep your revolving credit lines like credit cards below the maximum credit limit.
Credit Scores mean different things to different lending companies.
Below is an example of typical scoring ranges:
740-850 Excellent Credit.
700-739 Good Credit.
680-699 Fair Credit. Additional information may be required.
600-679 Poor Credit. A higher interest rate may be required to get a loan.
300-599 Very Poor Credit. Financing may be unobtainable.