For most people, buying a house is going to be the most important and expensive purchase of their lives. I get a lot of questions about the requirements for being able to buy a house. One of these, of course, is your credit score. To apply for a mortgage in the United States you need a decent credit score number. It doesn’t need to be in the highest range, but it needs to be respectable. So ask yourself this: in 2023, can I buy a house with a 704 credit score? I looked into it and here’s the answer.

Yes! A credit score of 704 is enough to qualify you for a standard mortgage in the United States. According to Quicken Loans, one of the largest mortgage providers in the country, the minimum credit score you need is about 620. With a score of 704, you would be way above that minimum threshold. 

There are other factors that would play into whether or not you get approved for a mortgage. A good credit score is just one of the factors. But if you have a credit score of about 700, you are in good shape to be able to buy a house in 2023. 

Can I Buy a House with a 704 Credit Score?

The good news is, if you are looking into buying a house, a credit score of 704 will not hold you back. In 2023, it is possible to qualify for a mortgage in the United States with a credit score of nearly 100 points lower. This is a bit of a contrast from just four years ago in 2019 when the median credit score for mortgages was 759

Remember, a good credit score alone won’t get you that mortgage. But taking steps to improve your credit score will certainly help when it comes time to apply for one. A credit score of 704 is considered good but not great. If you want to improve your chances of being approved, getting that score up above 749 will certainly help your chances!

Related Financial Geek Article: How Much House Can You Afford on a 200K Salary?

Is 704 a Good Credit Score?

Yes, it certainly is. FICO credit scores range from between 300 and 850, so 704 is near the top. Here are the breakdowns of the credit score ranges:

  • 300 – 639 
  • 640 – 699
  • 700 – 749
  • 750 – 850

So as you can see, 704 is kind of on the cusp of being a good credit score. Once you get above the median credit score in the US, there is a much higher chance of being approved for things like mortgages, student loans, and credit cards. 

Remember that credit scores are a measure of how risky of a candidate you are to lenders. On top of that, even if you get approved for a mortgage, it might be at a higher interest rate. There is plenty of incentive to aim for the highest credit score possible before you apply for a mortgage. 

What Credit Score is Best for a Mortgage?

These figures will change from year to year. Logically, when an economy is volatile, credit score numbers will fall across the board. What was a good credit score one year might not be as good the next. We already saw that the median credit score for mortgages in 2019 was 759. Obviously, since then the world has been a lot different place. It is not surprising that as we recover from the pandemic, median credit scores are lower. 

An article in the Wall Street Journal from earlier this year showed that those with a credit score of at least 760 get favourable mortgages and interest rates. Again, this should come as no surprise. The credit score range only goes as high as 850. Anyone with a credit score of 760 or higher is in the top tier of scores in the United States. 

Interest rates play a major role in mortgages. It is extremely beneficial to your future self to get the lowest possible interest rate. In the article mentioned above, those with a FICO score of 704 will pay nearly 30 basis points more on average. When it comes to mortgages, every little bit helps. Even if you plan on paying down your mortgage ahead of time, you would still ideally want the lowest interest rate possible.

How Can I Raise My Credit Score?

There are numerous ways to improve your credit score. The single most important way is to pay off your bills fully and on time. It is estimated that this factor accounts for up to 35% of your FICO credit score calculation. This is the largest measure of creditworthiness and the top thing that lenders will look at.

The other major way to improve your credit score is to keep your credit utilization rate low. What exactly does that mean? Credit utilization is how much of your available credit you are using. If you have a credit card that has a $10,000 limit, then spending $3,000 is a 30% utilization. 

Other ways to improve your score include not applying for a lot of credit at once. Do not over-apply for credit cards or lines of credit. Also, keep your oldest forms of credit open. Believe it or not, FICO takes into account the length of your credit history. Having a very old credit card that you have successfully paid off will look really good on your credit score calculation. 

The Bottom Line: Can I Buy a House with a 704 Credit Score?

In 2023, a credit score of 704 puts you in a great position to buy a house in the United States. While it isn’t a great credit score, 704 is solid enough that you should have no problem getting approved. If you want the best possible mortgage, try and improve your credit score up to about 760. This will allow you to get a more favourable interest rate!

Thanks for reading this today! I hope it helped!

Geek, out. 

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