Real Estate Glossary > C > Credit Score Definition

Credit scores are also known as FICO scores. Short for Fair Isaac Company, the corporation who created the most widely used formula, this credit score measures how likely a borrower is to default on a loan. It allows lenders to determine credit risk and is based on bill payment history, length and type of credit, along with many other factors. In general, the minimum credit score to be eligible for a conventional loan A mortgage loan not insured by any government program and follows guidelines set by the government-sponsored institutions Fannie Mae and Freddie Mac. will vary depending on market conditions. Borrowers with credit scores of 740 and up are considered to be the most qualified to get a mortgage loan Funds borrowed from a mortgage lender or broker to finance the purchase of a home. . Folks with scores below 700 should look into FHA loans A loan with a low down payment and competitive interest rates that is insured by the Federal Housing Administration, a government agency that that provides funding for these loans from mortgage insurance payments. or take steps to improve their score.