This is up from 730 reported in 2014, indicating an overall increase in the creditworthiness of home buyers.
The report, published by mortgage information website The Truth About Mortgage, used data collected from Fair Isaac Corporation (FICO), one of the leading providers of credit scoring services in the United States. The FICO scores taken into account ranged from 300-850, with higher scores indicating a better creditworthiness.
As expected, the average credit score increases as individuals age. Those aged 25-34 had an average score of 685, while those aged 35-64 had an average score of 726. However, the report also found that millennials (those aged 18-34) had an average score of 720, which is higher than the previous generation.
Meanwhile, the average credit score for first-time home buyers was 732, which is slightly lower than the national average. However, first-time homebuyers had the highest rate of improvement in their average score, with a 22 point increase from 710 reported in 2014.
The study also found that the home purchase loan delinquency rate had decreased from 4.6% in 2011 to 3.2% in 2017. This indicates a general improvement in the financial situation of home buyers over the past few years, as well as increased access to credit.
Overall, these findings suggest that the creditworthiness of home buyers has been improving in recent years. The average credit score has increased, with millennials in particular exhibiting a higher level of creditworthiness. At the same time, the delinquency rate has decreased, indicating that homebuyers are better able to manage their finances than before. As a result of this trend, lenders may be more willing to offer home loans to qualified borrowers.
In conclusion, the latest report from The Truth About Mortgage provides further evidence that home buyers are exhibiting increasing levels of creditworthiness. Millennials, in particular, seem to have improved their credit scores over the past few years, which may be due to increased access to credit. At the same time, the delinquency rate has decreased, suggesting that homebuyers are managing their finances better. This positive trend could lead to more lenders offering home loans to qualified borrowers in the future.
This article was contributed on Oct 17, 2023