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Home Credit Scores What Credit Score Do You Need to Buy a House?

What Credit Score Do You Need to Buy a House?

Credit score gauge behind house for sale

At a glance

What credit score you need to buy a house depends on the type of mortgage you take out.

Instantly access your report and discover your credit score from all three credit bureaus.

Checking your score won't hurt your credit.

Written by Yi-Jane Lee and Jesslyn Firman

Reviewed by Victoria Scanlon

May 26, 2022

Fresh advice you can trust

We promise to always deliver the best financial advice that we can. Our writers and editors follow strict editorial standards and operate independently from our advertisers and affiliates. Learn more about how we make money.

If you’re in the market to buy a new house, then odds are you’ll be looking at your mortgage options. With the current state of the housing market and the recent rise in average credit score in the US (in 2021 the estimated average score of mortgage borrowers hit 786), you may be wondering if you’ll make the cut. 1

We’ll explain what credit score you need to qualify for different types of mortgages, what exactly lenders are looking for, and how you can prime your credit in the months leading up to your mortgage applications.

Table of Contents

  1. What’s a good credit score for buying a house?
  2. Minimum credit score to buy a house by loan type
  3. Can you get a mortgage with a bad credit score?
  4. How to improve your credit score to buy a house

What’s a good credit score for buying a house?

Mortgage lenders generally consider scores at or above 620 to be a good credit score to buy a house. However, there isn’t a universal minimum credit score requirement in the mortgage industry, and you can still get a mortgage with a lower credit score. Some choosier lenders might also require a higher one.

Because credit scores are an assessment of your creditworthiness, it shouldn’t come as a surprise that a higher score will get you better loan options. However, credit score requirements for home loans vary depending on the type of loan you apply for, the lender you choose, and your overall financial profile.

Other requirements to buy a house

Credit scores aren’t the only factor lenders use to assess loan applications. They usually also look at your other personal and financial details, such as your monthly income, total savings, debt-to-income (DTI) ratio, assets, debt obligations, and employment status.

Minimum credit score to buy a house by loan type

What credit score you need to have to qualify for a mortgage depends on whether you’re applying for a private loan or a government-backed loan. Government loans generally have lower credit score requirements.

The table below shows the credit score you should shoot for to get various types of mortgages.

Minimum Credit Score Required for Different Types of Mortgages

Loan TypeMinimum FICO Credit Score
Conventional loan620
FHA loan (government-backed)580 with a 3.5% down payment
500 with a 10% down payment
VA loan (government-backed)No set minimum, but generally 580–620
USDA loan (government-backed)No set minimum, but 640 is required for streamlined application processing
Jumbo loan700 to 740 (depending on the loan amount)

Sources: US Department of Housing and Urban Development, US Department of Veterans Affairs, Fannie Mae, Freddie Mac, United States Department of Agriculture, Caliber Home Loans, Quicken Loans, and Rocket Mortgage.

To put those numbers into context, they largely fall into the range of Fair and Good credit scores in FICO’s scoring model:

FICO Credit Score Classifications

fico credit score range

The upshot is that unless your score is classified as Poor (within the red zone), you’ll probably be able to qualify for a mortgage of some type.

If the loans in the table above don’t mean much to you, don’t worry. We’ll explain what each type of mortgage is and which one you should plan on applying for in roughly descending order of popularity (with more common loans at the top).

Conventional loan

This is the most common type of mortgage. A conventional mortgage is a loan that isn’t government-backed.

In other words, you’ll be borrowing from a non-governmental mortgage lender, such as a bank, credit union, or online lender, and your loan also won’t be guaranteed by any government agency. Loans like this are generally harder to get than government-backed loans.

Conventional loans typically offer the best interest rates, and they generally have 15-year or 30-year repayment periods.

You generally need a credit score of at least 620 to get a conventional mortgage. This is because after a mortgage lender issues a loan to a borrower, they often sell it to Fannie Mae or Freddie Mac, and both of these companies have a minimum credit score requirement of 620. 2 3 4

With that said, you might still be able to get a conventional mortgage with a lower credit score if you provide “nontraditional credit data” (in the FHFA’s own words) or you’re planning on refinancing under the Refi Plus/DU Refi Plus Home Affordable Refinance Program (HARP). 5

FHA loan

An FHA loan is a type of government-backed loan that’s insured by the Federal Housing Administration (FHA), meaning that the FHA protects your lender against loss if you default on your mortgage. This makes it easier to qualify for an FHA mortgage than a conventional loan.

Although the minimum credit score needed for an FHA loan is low, a higher score makes you eligible for a lower down payment. Here’s what score you’ll need: 6

  • 10% down payment: 500 credit score
  • 5% down payment: 580 credit score

FHA loans are attractive for first-time home buyers because of their minimal credit requirements and low closing costs. To get an FHA mortgage, you won’t apply directly to the Federal Housing Administration—instead, you’ll need to apply through an FHA-approved mortgage lender.

VA loan

A VA loan is insured by the US Department of Veterans Affairs. To qualify, you must be a current or former member of the US Military or National Guard or be the spouse of a military member who died on duty or who was discharged due to a service-related disability. 7

VA mortgages have the following benefits: 8

  • No down payment (unless required by the lender)
  • No mortgage insurance requirement
  • Low interest rates
  • VA staff assistance if you’re delinquent on your loan

However, be prepared to pay a one-time upfront funding fee, unless you’ve received VA disability compensation. While there isn’t a government-set minimum credit score requirement for VA loans, lenders set their own minimum credit scores, which often range from 580 (e.g., Caliber Home Loans) to 620 (e.g., Quicken Loans).

USDA loan

A USDA mortgage is insured by the United States Department of Agriculture (USDA). This type of loan is designed for low-income borrowers living in a qualifying rural, small-town, or suburban area. These mortgages don’t require a down payment (though you’ll still have to pay closing costs). 9

Like VA loans, USDA loans have lower interest rates than conventional loans and don’t have a government-set minimum credit score either. However, if you don’t have at least a 640 credit score, you won’t qualify for streamlined credit processing, and you’ll instead need to meet other requirements. 9

The USDA offers three main mortgage programs:

  • USDA Guaranteed Loan Program: Loans issued by participating lenders for borrowers with income below 115% of the median household income.
  • USDA Direct Loan Program: Loans issued by the USDA for qualifying low-income borrowers. They aim to help applicants repay their loans by reducing their mortgage payments for a while.
  • USDA Home Repair Program: Loans issued by the USDA for qualifying low-income homeowners to improve or repair their homes.

Jumbo loan

A jumbo loan is a type of mortgage offered by private (non-government-backed) lenders. They’re specifically designed for people who want to borrow more than the “conforming loan limit” set by the Federal Housing Finance Agency—in other words, people who want unusually large mortgages.

Since there’s more risk involved for lenders, jumbo loans often have higher interest rates than conventional conforming loans. They also generally require a larger down payment and a credit score of at least 700.

Can you get a mortgage with a bad credit score?

Yes, you can get a mortgage with a bad credit score, although your options will be limited. As is the case with other types of installment loans, if you have poor credit, you’ll probably only qualify for mortgages with high interest rates and large down payments.

Your best bet is to start by looking into government-backed loans (e.g., FHA, USDA, and VA loans) because their score requirements tend to be less strict.

Make sure you don’t have any negative items in your credit history that will disqualify you:

Disqualifying Factors for Government Loans

FHA LoansVA LoansUSDA Loans (Streamlined Processing)
  • Foreclosure or deed-in-lieu of foreclosure (past 3 years)

  • Chapter 7 bankruptcy (past 1–2 years)
  • Foreclosure or deed-in-lieu of foreclosure (past 1–2 years)

  • Bankruptcy (past 1–2 years)
  • Foreclosure, deed-in-lieu of foreclosure, short sale, or mortgage charge-off (past 3 years)

  • Bankruptcy (past 3 years)

  • Debt settlement (past 3 years)
  • Sources: US Department of Housing and Urban Development, US Department of Veterans Affairs, and US Department of Agriculture.

    What should you do if your credit history disqualifies you from getting a mortgage?

    If you don’t qualify for any private or government-backed mortgages, then you could ask a family member or close friend to cosign your loan. This means they’re assuming responsibility for the loan if you default on it (aka stop paying it), which will cause many lenders to relax their requirements.

    However, this is a huge responsibility. In many cases, you’ll be better off waiting to buy a home until you’ve taken steps to rebuild your credit.

    If you have a bad credit score but a steady income, consider private mortgage lending

    It’s possible to get a mortgage from a private lender, i.e., one that’s not associated with a financial institution. Private lenders often have looser credit score requirements than traditional lenders. Most private lenders charge 6–15% on residential mortgages, and if you have a steady income and a lot of assets on hand, you may be able to get an interest rate on the lower end of that range, even if your credit score leaves something to be desired.

    How to improve your credit score to buy a house

    If you don’t have a high enough credit score to buy a house, taking steps to improve your credit score is definitely worthwhile. (Actually, given the many benefits of having good credit, it’s worthwhile even if you’re not currently in the market for a mortgage.)

    Even though it’s impossible to raise your credit score by 100 points overnight, you’ll eventually meet the credit requirements for a mortgage if you practice good financial management and follow these tips:

    • Dispute errors on your credit reports: Check your credit report for inaccurate information that’s dragging your score down. If you spot any errors, immediately file a credit dispute, which you can do with our free credit dispute letter template.
    • Bring past-due accounts current: Pay off your debts in collection or charge-offs if you have any, as they can cause significant damage to your credit score. If you already have a loan and you’re behind on your payments, then getting current will also help show that you can handle a new financial responsibility.
    • Make on-time payments: Your payment history is the largest factor affecting your credit score, so always paying your bills on time can greatly benefit your score and boost your odds of getting approved for a mortgage.
    • Get a credit-builder loan: If you have an insufficient credit history or no credit score at all, then getting a credit-builder loan can help round out your credit profile and look much more attractive to lenders. This is especially true if you only have revolving credit accounts (aka credit cards) and have never taken out a loan.

    Takeaway: The minimum credit score needed to buy a home varies depending on the type of mortgage you get.

    • Government-backed mortgages generally have lower credit score requirements than conventional mortgages and other private loans.
    • Conventional mortgages require a 620 credit score, and nonconforming jumbo mortgages require even higher credit scores above 700.
    • FHA loans have the lowest credit score requirement of any mortgage, requiring only a 500 credit score (for a 10% down payment) or 580 score (for a 3.5% down payment).
    • VA loans don’t have a government-set minimum credit score, but USDA loans require a 640 credit score for streamlined application processing.
    • If you have bad credit, you may still be able to get an FHA mortgage. If not, then you should take steps to improve your credit score before applying for a mortgage.

    Article Sources

    1. Federal Reserve Bank of New York. "Quarterly Report on Household Debt and Credit 2021: Q2" Retrieved May 26, 2022.
    2. Federal Housing Finance Agency. "What Types of Mortgages Do Fannie Mae and Freddie Mac Acquire" Retrieved May 26, 2022.
    3. Fannie Mae. "Selling Guide" Retrieved May 26, 2022.
    4. Freddie Mac. "Additional Requirements for Borrowers with Usable Credit Scores" Retrieved May 26, 2022.
    5. Federal Housing Finance Agency. "Fannie Mae and Freddie Mac Guarantee Fees: Request for Input" Retrieved May 26, 2022.
    6. US Department of Housing and Urban Development. "Section A. Borrower Eligibility Requirements" Retrieved May 26, 2022.
    7. US Department of Veterans Affairs. "Eligibility Requirements for VA Home Loan Programs" Retrieved May 26, 2022.
    8. US Department of Veterans Affairs. "VA Guaranteed Loan" Retrieved May 26, 2022.
    9. US Department of Agriculture. "Single Family Housing Guaranteed Loan Program" Retrieved May 26, 2022.

    Yi-Jane Lee

    View Author

    Yi-Jane Lee is a credit analyst who writes for FinanceJar. Her work covers credit repair, the credit scoring industry, budgeting, and debt. She has a BA from McGill University in Montreal, Quebec.

    Jesslyn Firman

    Credit Analyst

    View Author

    Jesslyn Firman is a credit analyst for FinanceJar. Her work covers credit repair and credit scores, and in the past she's extensively researched and written about the insurance industry. Jesslyn has a B.S. in Finance and Accounting and an MBA in Management.

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