What’s the credit score you need to buy a house?
Quick insights
- For conventional mortgages, you usually need a minimum credit score of 620 or higher to qualify; exceptions apply, consult with a lender for more information.
- Government-backed loans may allow you to borrow with a lower credit score.
- Understanding your credit score and full financial picture can help you prepare to buy a home.
You may know that your credit score is an important consideration when you want to borrow money, from credit cards to car loans. But do you know how your credit score can affect your mortgage? There are different credit score requirements for various home loans, and your score.
Why does your credit score matter to mortgage lenders?
Your credit score is a three-digit number ranging from 300–850, based on information from your credit report. That data may reflect how much debt you have overall, your payment consistency and other factors. Consequently, mortgage lenders use a prospective borrower’s credit score to help assess the likelihood of them paying back a loan. While a credit score is an important variable when applying for a mortgage, it’s not the only detail considered.
What is a good credit score to buy a house?
The credit score you need to qualify for a mortgage loan can vary based on the mortgage provider, the type of home loan and your overall financial profile. In general, a higher score may help you qualify more easily and access a lower interest rate. This can also make your monthly payments more affordable. Even if your score isn’t perfect, there are a variety of loan options available for different credit ranges.
Credit score ranges
- High 700s or greater (Excellent): Borrowers in this range often have strong approval odds and may qualify for competitive mortgage interest rates.
- Mid-600s to mid-700s (Good): A good score can open the door to many loan programs, including conventional mortgages, with favorable terms and manageable interest rates.
- High-500s to low 600s (Fair): Various mortgage loans may be available to borrowers in this range.
- Between 300 to mid-500s (Poor): Purchasing a home with poor credit can be possible depending on the lender and loan type; homebuyers may benefit from improving their score and discussing options with a home lending expert.
Loan type
Choosing the right mortgage begins with understanding the different loan types available and the minimum credit scores typically expected. While lenders look at many factors when evaluating applications, your credit score acts as a baseline indicator of creditworthiness. Below is a summary of common loan types and typical minimum credit score guidelines.
Conventional loans
- You’ll typically need a credit score of at least 620 to qualify for a standard conventional mortgage backed by Fannie Mae® or Freddie Mac®.
- Fannie Mae HomeReady®Opens overlay: This option was designed for low-to-moderate income homebuyers and may offer reduced mortgage insurance and flexible guidelines.
- Freddie Mac HomePossible®Opens overlay: Similar in purpose to HomeReady, this conventional-type program helps eligible homebuyers access homeownership with low down payments and flexible income limits.
Jumbo loans
- Generally jumbo loans require a minimum credit score of 680 or higher due to the larger loan amounts being riskier to mortgage lenders.
- Jumbo loans exceed the conforming loan limits set by Fannie Mae and Freddie Mac and are used for higher-priced properties or luxury homes.
FHA loans
- With the Federal Housing Administration’s backing, borrowers may qualify with a credit score of 580 if making a down payment of 3.5%.
- If the down payment is 10% or more, a lower credit score (such as 500) may sometimes be accepted under certain mortgage providers and FHA guidelines.
VA loans
- Backed by the U.S. Department of Veterans Affairs for eligible servicemembers, veterans and certain spouses; there is no formal minimum credit score set by the VA.
- Individual lenders and loan providers may set their own minimums (often 620 or higher), so credit score expectations will vary when applying for a VA loan.
USDA loans
- The U.S. Department of Agriculture rural home-loan program (USDA loans) also has no formal credit score minimum at the federal level. Chase does not offer USDA loans at this time.
- Like VA loans, individual mortgage lenders may impose their own requirements based on credit profiles and risk.
Can a higher credit score get you better interest rates?
Although a higher credit score doesn’t guarantee a certain interest rate, higher credit scores can correlate with more competitive interest rates. If you don’t qualify for the interest rate you’d hoped for, you may consider improving your credit score. To do so:
- Pay down your credit card bills: When determining your score, credit reporting agencies look at your credit utilization ratio, which is the difference between your debt and available credit. The lower your balances, the better your utilization ratio and the higher your score.
- Consolidate your debt: Credit agencies weigh revolving credit, like credit cards, differently from fixed-rate loans. Consolidating your debt with a lower-interest-rate personal loan could help.
- Become an authorized user: If you have a parent or partner who has better credit, becoming an authorized user on one of their credit cards could help improve your credit score. Just keep in mind, your score could also be affected by their spending decisions.
If you don’t have time to improve your credit score before you buy your home, you could improve your credit over time and refinance for a better interest rate down the road.
How to raise your credit score before you buy a house
Improving your credit score before applying for a home loan can help you qualify more easily and potentially secure a lower mortgage interest rate. Raising your score takes time and consistency, but small improvements can make a meaningful difference in your mortgage options and monthly payment.
- Pay bills on time: Your payment history has one of the biggest impacts on your credit score.
- Lower your credit card balances: Keeping your credit use below 30% of your limit can help improve your score.
- Avoid opening new accounts: Too many hard inquiries before applying for a mortgage can temporarily lower your credit score.
- Check your credit reports for errors: If you spot a mistake, dispute it. Even small errors can affect your credit score.
In summary
It’s clear that your credit score is a factor to consider when looking to buy a home. Along with other financial indicators, your credit score helps determine the mortgage you qualify for and its terms. The minimum credit score needed to buy a house depends on the mortgage lender’s requirements and loan type. Although most conventional loans require a credit score of about 620, some lenders may offer loans meant for potential borrowers with little to no credit score.
Looking for a loan that fits your credit score? Apply for a home loan today. We can help you find the right loan for your needs.
Credit score to buy a house: FAQs
What is a good credit score to buy a house?
A good credit score is typically in the mid-600s to mid-700s or higher. Homebuyers in this range are more likely to qualify for lower interest rates and more home loan options. Even if your score is lower, there are ways to work toward homeownership.
What is a bad credit score if you are looking to buy a house?
A “bad” (poor) credit score for homebuying usually falls in the range of 300 to the high 500s. In this range, you may face stricter approval requirements, such as a larger down payment. With a poor credit score, certain loan programs and improving your credit can be helpful. For more information on home loan options with low credit, check out our article on home loans for borrowers with low credit.
Does the price of the home affect the minimum credit score?
A home’s price should not affect the credit score a mortgage lender wants in order to approve your application. The lender will likely consider your income, down payment and other assets before making a final decision, not just your credit score.
Can I buy a house with a 580 or 600 credit score?
If your credit score is 580 or higher, you could qualify for an FHA loan based on that credit score. However, if you have a co-borrower, co-signer or a joint mortgage with someone with a higher credit score, it may be possible to qualify for a conventional loan.
