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How Co-Borrowers’ Credit Scores Impact Home Purchases

At Joe Leffew Properties, we understand the importance of having a good credit score when purchasing a home. Whether you’re a seasoned or first-time homebuyer, your FICO score and credit history are crucial factors, especially when buying a property with a partner. In this blog post, we will discuss how co-borrowers’ credit scores affect a home purchase, the importance of FICO scores, and whether you should apply with your spouse or alone. This comprehensive guide is designed to be SEO rich with a proper SEO structure, ensuring you receive valuable and relevant information.

What is a FICO score and its importance in home buying?

Co-Borrower mortgage loan documents and a house-shaped keyring on a table.

Mortgage Loan Documents: A key step in securing your dream home.

FICO is an acronym for the Fair Isaac Corporation, the company responsible for developing the widely used credit scoring system. Your FICO score, commonly referred to as your credit score, ranges from 300 to 850. This number evaluates your creditworthiness through factors such as previous payment history, current debt, length of credit history, types of credit, and new credit.

When purchasing a home or obtaining a loan, lenders primarily use FICO scores to determine the borrower’s level of risk. Having a good credit score is essential for securing a favorable interest rate and improving your chances of loan approval.

How do lenders determine which credit score to consider?

Lenders typically review three credit scores from each of the three major credit bureaus—Experian, TransUnion, and Equifax—and take the median score for your application. Borrowers should aim for a credit score of at least 680, which is generally the minimum requirement for approval of conventional loans. For borrowers with lower credit scores, FHA loans allow scores as low as 580, or even 500 with a 10% down payment. The higher your credit score, the better the interest rate you’ll receive.

Deciding between a joint mortgage application or applying alone

When determining whether to include a spouse or co-borrower on a mortgage application, consider which option makes the most financial sense. If your combined income is necessary to qualify for the loan, applying jointly might be the only option. However, each situation has its pros and cons, and applying together may still be the best choice even if you can qualify for a loan on your own.

Impact of a partner’s bad credit on a joint application

Wooden tiles spelling out the words "credit score" on a table with co-borrower financial documents in a red book nearby.

Credit Scores: A crucial factor in home purchases for co-borrowers.

When applying jointly, lenders use the lower credit score of the two borrowers to determine the interest rate. For example, if your median score is 780 and your co-borrowers is 620, the lender will base the interest rates on the lower score. In this case, applying individually might be more advantageous.

However, the downside of applying alone is that the lender will only consider your income, not the combined income of both borrowers. While your credit score may be higher, this could result in a lower total loan amount for which you qualify.

Inclusion of both names on the home title

If it’s essential for both partners to have their names on the home title, don’t worry. You can still be on the title of the home without being on the mortgage.


Understanding the impact of co-borrowers’ credit scores on home purchases is crucial for making informed decisions when buying a property. At Joe Leffew Properties, our team of expert real estate agents is here to guide you through every step of the home-buying process. Reach out to us today for personalized advice and assistance tailored to your unique situation.

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