Credit Score to Buy a House: What You Need to Know
Key Takeaways
- There’s no single credit score required to buy a house; minimum requirements vary by loan type and lender.
- Conventional loans typically require a minimum 620 credit score, while some government-backed loans allow lower scores.
- A higher credit score may help you qualify for more loan options and lower interest rates.
- Improving your credit before applying for a mortgage could help strengthen your loan options and borrowing terms.
Having the right credit score can make it easier (and less expensive) to buy a house—and get favorable loan terms. Your credit score helps mortgage lenders evaluate how likely you are to repay what you borrow and can affect the loan programs, interest rates, and other terms available to you.
However, there isn't a single “minimum” credit score you need to buy a house. Minimum requirements vary by mortgage type and lender, and your credit is only one factor considered. In this article, we’ll explain the credit scores commonly needed for different mortgage types, how your score can affect your loan qualification, and ways to improve your credit before buying a home.
How Credit Scores Affect Buying a House
Because your credit score reflects your history handling debt, lenders use it as one factor when determining whether you qualify for a mortgage loan and what terms might be available. Your credit score can affect the types of mortgages you qualify for, your interest rate, and ultimately how much you pay to borrow. Depending on the loan, your credit score can also affect costs, such as mortgage insurance.
In general, a higher credit score may make it easier to qualify for more loan options and receive more favorable terms, including a lower interest rate. However, your credit score isn't the only factor lenders consider when qualifying you for a mortgage; your income, debts, assets, down payment, and other financial information can also affect mortgage approval.
If you’re currently building or repairing your credit, homeownership may still be within reach. You can compare minimum credit requirements across lenders, explore loan programs with more flexible credit score requirements, or focus on improving your credit before applying.
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What Credit Score Is Needed To Buy a House?
In general, you need a credit score of at least 620 to qualify for a conventional mortgage. However, government-backed options may allow for much lower scores, such as 500.
Here’s how credit score requirements can vary based on loan type:
- Conventional loans: You’ll generally need a score of 620 or higher to qualify for a conventional purchase loan.
- FHA loans: FHA loan credit score requirements can be as low as 500 (with a 10% down payment). Freedom Mortgage requires a minimum FHA credit score of 550.
- VA loans: The U.S. Department of Veterans Affairs doesn’t set a minimum VA loan credit score requirement, but lenders often require a minimum score between 580 and 620 (Freedom Mortgage requires only a 550 minimum credit score).
- USDA loans: If you live in a qualifying area to get a USDA loan, it typically requires a credit score of 620, but lenders may accept lower scores with manual underwriting.
Credit score requirements vary based on the risk associated with each loan. FHA loans typically have more flexible credit requirements because they’re government-insured, while conventional and jumbo loans may require stronger credit because of their larger loan amounts and lack of government backing.
You can get your FICO® Score (a popular credit score model) online through the three major credit bureaus (Equifax®, Experian®, and TransUnion®). If you are a Freedom Mortgage customer, primary borrowers can check their FICO® Score on our mobile app.
Credit Score to Buy a House FAQs
Have more questions about how credit scores relate to buying a home? We’ve got you covered!
Do Credit Checks for Mortgage Applications Hurt Your Credit Score?
When Freedom Mortgage prequalifies you for a mortgage to purchase a house, we will conduct a hard credit check, which can temporarily cause your credit score to drop by a few points for a short period. When you give us permission to pull your credit for prequalification, we can often tell you your current credit scores.
What Is a Good Credit Score to Buy a House?
According to the Consumer Financial Protection Bureau (CFPB), mortgage applicants with credit scores in the mid- to high-700s and above often receive the best interest rates from lenders.
How Can You Improve Your Credit Score to Buy a Home?
You can improve your credit score by:
- Reducing your debt
- Keeping your debt-to-income ratio (DTI) low
- Making payments on time
- Disputing potential errors in your reports
- Limiting credit applications or hard checks when possible
- Refinancing or consolidating non-mortgage debt for lower interest rates and faster loan repayment
Can You Get a Mortgage with a Bad Credit Score?
While borrowers with lower credit scores may not qualify for the lowest possible mortgage rates, affordable home financing options are still available through Freedom Mortgage. For example, you might qualify for an FHA loan, which has more flexible credit requirements than conventional loans.
Final Thoughts: Credit Score Requirements to Buy a House
Knowing your credit score can help you determine when to apply for a mortgage. It can also help you establish expectations for your approval odds, loan terms, and costs. If you’re wondering what mortgage rate your credit score could help you qualify for today, get prequalified and start the next steps toward buying an affordable home with Freedom Mortgage.
Victoria Araj is the Senior Director, Managing Editor at Freedom Mortgage. In her 20 years of working for top mortgage lenders, she’s held roles in mortgage banking, public relations, editorial content, and more. She has a bachelor’s degree in Journalism with an emphasis in Political Science from Michigan State University, and a master’s degree in Public Administration from the University of Michigan. She has spoken at several industry conferences, where she’s discussed the importance of editorial content for brands.
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