For a conventional mortgage loan, you typically need a credit score of 620 or higher to indicate that you are likely to repay your debt on time and get approved. However, there are other types of loans that may be available for people with lower scores. In addition, with a higher score, you may qualify for more favorable rates and terms.
For many, buying a home is a huge financial step, representing the biggest purchase they’ll ever make in their life. Read on to learn more about how your credit score impacts your ability to access a home loan and which terms are available to you.
Key Points
• Conventional loans typically require a minimum credit score of 620.
• FHA, VA, and USDA loans can accommodate credit scores as low as the 500s.
• Higher credit scores lead to better mortgage terms and lower interest rates.
• Payment history and credit utilization, among other factors, may significantly affect credit scores.
• Lenders may evaluate employment status, income, down payment, assets, and debt-to-income ratio when reviewing a mortgage application.
Average Credit Score to Buy a House
About 70% of mortgages are conventional loans, making these far and away those most common mortgage type. For a conventional mortgage, lenders will typically require a minimum credit score of 620. That said, on average, homebuyers had a credit score of 758 in 2024, considerably higher than the required minimum.
On the topic of credit scores, here’s how the FICO® Score, a popular credit-scoring model, arranges its credit score ranges:
• 300-579: Poor
• 580-669: Fair
• 679-739: Good
• 740-799: Very good
• 800-850: Exceptional or excellent
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What Credit Score Do I Need to Buy a House?
As mentioned above, the credit score you need to buy a house will vary depending on the loan type you apply for. In general, necessary credit scores will range from 500 to 700. The higher the score, the easier it generally is to secure credit and qualify for favorable terms and interest rates.
Minimum Credit Scores by Home Loan Type
There are several different types of home loans you may apply for depending on your circumstances, including conventional loans, jumbo loans, FHA loans, VA loans, and USDA loans. Each type of loan has a different minimum credit score requirement.
Conventional Loans Minimum Credit Score
A conventional loan is a home loan that is backed by private lenders. It is not backed or insured by the government. This is the most common type of home loan and usually requires a minimum credit score of 620. If your credit score is higher than that (say, in the very good or excellent ranges), you may qualify for lower interest rates and better terms.
Jumbo Loans Minimum Credit Score
Jumbo loans are loans that are too big to be covered by conventional loans as determined by the Federal Housing Finance Agency (FHFA). According to the FHFA, in 2025, loans bigger than $806,500 require a jumbo loan in most counties. Jumbo loans usually have a minimum credit score of 700, one of the highest credit score thresholds among mortgage options.
FHA Loans Minimum Credit Score
A Federal Housing Administration, or FHA, loan is one that is backed by the federal government. This program helps make buying a house more affordable for families with low or moderate incomes. Government backing means these loans may be extended to individuals who would otherwise likely be seen as risky by conventional lenders. FHA loans typically have a low minimum credit score requirement of 500 with a 10% down payment and a 580 credit score with a 3.5% down payment.
VA Loans Minimum Credit Score
A VA loan is partially guaranteed by the Department of Veterans Affairs. They are available to veterans, service members, and their families, and some lenders will require a minimum credit score of 620. That said, there is no official minimum credit score requirement, so you may be able to access a VA loan with a lower score. If that is your situation, you may have to provide additional documentation in order to be approved.
USDA Loans Minimum Credit Score
USDA loans are guaranteed by the U.S. Department of Agriculture and are available in certain individuals in rural areas. They often look for a minimum credit score of 580, but as with VA loans, there isn’t a strict requirement. You might qualify for a USDA loan with a lower score if a lender reviews your financials and determines you are creditworthy.
Related: The 52 Week Savings Challenge
How Your Credit Score Affects Mortgage Rates
Your credit score is a three-digit representation of your credit history. Higher scores demonstrate that you have been responsible with your credit, paying bills on time and avoiding taking on more debt than you can manage. Lenders see potential borrowers with high scores as being less risky than those with lower scores. If you’ve managed credit wisely in the past, you may well do so again in the future.
As a result, lenders may offer borrowers with high scores credit with better terms and lower interest rates. Lenders may also extend credit to borrowers with lower scores. However, to compensate for the extra risk they are taking on, they may charge higher interest rates, which increases the overall cost of borrowing.
Here’s an example of mortgage interest rates for conventional loans by credit score as of mid-2024:
• Those with a credit score of 760-850 would have a 6.976% APR
• Those with a credit score of 660-679 would have a 7.589% APR
• Those with a credit score of 620-639 would have an 8.565% APR
While these differences among rates may not sound huge, over the life of a loan, an additional percent or so in interest can really add up.
Other Factors Mortgage Lenders Consider
In addition to your credit score, lenders will also likely look at some other factors:
• Your employment status and income. They may want to see that you have a steady stream of cash to pay your monthly mortgage bill.
• How much money you have for a down payment. The more money you put down, the less risk the lender has to take on. As a result, higher down payments may help you qualify for loans and lower interest rates.
• Other assets you have that could be used to make debt payments in case you don’t have enough income.
• The value of any other property you own.
• Your debt-to-income ratio (DTI). This is a comparison of how much debt you owe versus how much money you have coming in. It’s a quick way to let lenders know whether you have enough income to cover your liabilities.
Can You Get a Mortgage With a Bad Credit Score?
The lowest credit score category is poor, which ranges from 300 to 579. With a score in this range, you may not qualify for a conventional loan.
However, you can get a mortgage with a low credit score as long as it meets minimum score requirements. A government-backed loan may be your best bet, since some lenders may approve a borrower with a credit score below 580 (say, 500 and up). That said, you may pay more in interest than those with higher scores. You might prefer to wait and build your score before applying for a home loan.
How to Build Your Credit Before Getting a Mortgage
It may be worthwhile to build your credit before you apply for a loan. There are several factors that affect your credit score.
One of the best ways to build your credit score can be to always pay your bills on time. This is the number-one factor in determining the most common credit scores, including FICO and VantageScore.
The second biggest factor is your credit utilization rate, or how much of your available credit you’re using. In general, the less the better. Lenders typically prefer that you use no more than 30% of your available credit. Pay down debt to lower your utilization rate and raise your score.
Recommended: How Long Does It Take to Build Credit?
Factors in Mortgage Preapproval
A mortgage preapproval is a statement from a lender that you are likely to qualify for a mortgage. It can be a helpful document to show sellers as it can demonstrate that you are serious about making a purchase and likely to receive financing.
For a preapproval, lenders typically look at such factors as credit score, income, assets, DTI, and employment verification. Thanks to this financial review, being preapproved can give you a sense of confidence about your ability to go house shopping.
Credit Score Tips
Your credit score is not static. It changes over time, and your score may vary depending on the scoring system used.
The credit reporting bureaus update your score after anything happens that affects your credit. So if you are late with a payment or if your credit utilization climbs higher, you may see your score drop. On the other hand, if you were to lower your credit utilization, you might positively impact your score. These actions can all help build your score: paying your bills on time, every time; managing your credit utilization; not applying for too much credit in a short period of time; having a good mix of credit; and maintaining a longer credit history.
It’s also important to monitor your credit score and regularly examine your credit report for errors. (You can check your credit report without paying each week from each of the credit reporting bureaus: Experian®, Equifax®, and TransUnion®.)
If you catch a mistake, dispute the error with the credit reporting bureau immediately to prevent it from dinging your score.
You may be able to build a stronger credit score with the help of healthy financial habits, such as budgeting and saving regularly, which can help you stay out of debt and manage payments. You might use spending apps and money tracker apps in this pursuit. A good place to start: See what your financial institution offers. You can also search online for third-party tools.
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The Takeaway
Your credit score can impact the type of loans you qualify for, as well as the terms and interest rates lenders may offer. For a conventional home loan, you will typically need a score of 620 or higher, and a score of 700 and up for a jumbo loan. Government-backed loans, such as FHA, VA, and USDA loans, however, may accept credit scores in the 500s. Those with lower scores will typically pay higher interest rates.
While you may qualify for a loan with the minimum required credit score, it may be beneficial to monitor and build your score before taking out a loan to reduce the overall cost of borrowing.
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FAQ
What is a decent credit score for buying a house?
On average, homebuyers had a credit score of 758 in 2024, but you may be able to qualify for a loan with a lower score. Typically, conventional loans are available to those with scores of 620 and up. Usually, higher scores can give access to more favorable rates and terms.
Can you buy a house with a 600 credit score?
With a credit score of 600, you may be able to qualify for a government backed loan, such as an FHA, VA, or USDA loan. Or you might choose to wait and build your score to 620 or higher, which could then give you access to a conventional home loan.
How much house can I afford if I make $70,000 a year?
There are several rules of thumb about how much to spend on housing each year. One common one is that you shouldn’t spend more than 30% of your gross income each month on housing costs including your mortgage and property taxes. That works out to a mortgage payment of about $1,650 each month. You can then use online mortgage calculators to explore how much you can borrow to fit this monthly budget. In some tight housing markets, people may spend more. In fact, one recent study found that more than 20% of homeowners indeed exceeded this amount.
What credit score is needed to buy a $400,000 house?
Securing a mortgage isn’t just a matter of your credit score versus how much the prospective home costs. Several factors will be evaluated by lenders in addition, such as down payment amount, income, and more. For a conventional loan, you likely need a credit score of 620 or higher, while you may access a government-backed loan with a lower score (say, 500 and above) if you meet certain criteria.
Is a 580 credit score good enough to buy a house?
With a credit score of 580, you may qualify for an FHA, VA, or USDA loan. You can work with online tools and specific lenders to see what your odds of qualifying are or seek out preapproval.
How much income do I need for a 300K FHA loan?
The income you need will vary depending on the lender guidelines and other factors, such as down payment funds you may have available, your credit score, and more. It could be helpful to discuss your qualifications with a lender or use an online calculator to see what you could qualify for.
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