Your credit score is one of the most important factors when applying for a manufactured home loan. Lenders use it to assess your financial responsibility, determine loan eligibility, and set your interest rate. Understanding how credit works—and how to improve your score—can make a big difference in securing the best financing options for your new home.
How Credit Affects Your Manufactured Home Loan
When applying for a manufactured home loan, lenders evaluate your credit score to determine:
- Loan approval – A higher score increases your chances of approval.
- Interest rate – Better credit typically means lower interest rates, saving you money over time.
- Loan terms – Some loan programs require a minimum credit score to qualify.
What Credit Score Do You Need?
The required credit score depends on the type of loan you’re applying for. While every lender has different requirements, general guidelines include:
- 620+ – Ideal for securing the best interest rates and terms.
- 580-619 – Eligible for some loan programs but may come with higher interest rates.
- Below 580 – Fewer financing options; you may need to improve your score or provide a larger down payment.
Even if your score is lower, Horizon Homes can help you find lenders willing to work with a range of credit profiles.
What Goes Into Your Credit Score?
Understanding what impacts your credit score can help you improve it before applying for a loan. The main factors include:
1. Payment History (35%)
Your record of making on-time payments is the most important factor. Late or missed payments can lower your score.
2. Credit Utilization (30%)
This refers to how much of your available credit you’re using. Keeping balances below 30% of your credit limit helps maintain a strong score.
3. Length of Credit History (15%)
A longer credit history can improve your score. If you’re new to credit, keeping old accounts open and in good standing is beneficial.
4. Credit Mix (10%)
Having a mix of credit types—such as credit cards, auto loans, and personal loans—shows lenders you can handle different types of debt responsibly.
5. New Credit Inquiries (10%)
Applying for multiple loans or credit cards in a short period can lower your score. Try to limit new applications before applying for a home loan.
How to Improve Your Credit Score Before Applying
If your score isn’t where you’d like it to be, here are steps you can take:
✔ Pay Bills on Time – Set up automatic payments or reminders to avoid late payments.
✔ Reduce Credit Card Balances – Lowering your debt improves your credit utilization ratio.
✔ Check Your Credit Report – Review your report for errors and dispute any inaccuracies.
✔ Limit New Credit Applications – Avoid opening new accounts right before applying for a loan.
✔ Build Positive Credit History – If you’re new to credit, consider a secured credit card or becoming an authorized user on a family member’s account.
Finding the Right Financing with Horizon Homes
Navigating the credit requirements for a manufactured home loan can be overwhelming, but you don’t have to do it alone. Horizon Homes connects you with trusted lenders who offer financing options tailored to your credit profile. Whether your credit is excellent or needs improvement, we’ll help you explore the best solutions to make homeownership a reality.
Ready to take the next step? Contact us today to discuss your financing options and start your journey toward owning a manufactured home!