By ScoreSense.com

The lowest (best) mortgage rates go to the borrowers with the highest credit scores. If your credit scores are low, there are poor-credit home loans available, but the interest rates are higher and in some cases a higher down payment is required.

Credit scores are generally on a scale from 300 to 850. Lenders give their best rates to people with scores over 700. To be eligible for an FHA mortgage, you must have a minimum credit score of 500.

Before you apply for a mortgage, it’s best if you know your credit scores. Get your credit reports and scores from the three major credit bureaus: Experian, Equifax and TransUnion. Check for errors and see how you can improve your scores before applying for a mortgage.

If you’re a first-time home buyer with poor credit, you might want to consider an FHA-backed loan. FHA mortgages are popular because there are fewer lending restrictions and more favorable interest rates. And for those with credit scores of 580 or higher, some loans allow a 3.5 percent down payment.

Mortgage rates will be higher than those of non-FHA prime borrowers, though, and you’ll have to pay private mortgage insurance premiums if your down payment is less than 20 percent.

You can potentially offset poor credit with a large down payment or proof of income. Still, if your scores are below 700, you might want to work on improving your scores before applying for a mortgage.

Start by reviewing your credit standing. Get credit scores and reports from all three bureaus in seconds from FreeScore360, powered by ScoreSense®. ScoreSense also monitors your credit and alerts you to changes on your credit profile, helping you to protect your identity and your future credit standing.