When you apply for an FHA loan, the lender evaluates your credit worthiness based on past credit performance. The FHA requirement is that a borrower must have a good credit history that is proven by a solid track record of timely payments. These borrowers are usually approved. A borrower who has a poor credit history with delinquent accounts, late or slow payments and a lack of good financial judgment is not a good candidate for an FHA loan approval.
Here is a list of items that affect the borrower’s credit worthiness:
- No credit history
- Late payments
- Chapter 13 bankruptcy
- Chapter 7 bankruptcy
- Collections, judgments, federal debts