What Credit Score Do You Need To Buy A House? | Bankrate (2024)

Key takeaways

  • Your credit score is one of the most important factors that lenders look at when you apply for a mortgage loan.
  • Different types of loans have different minimum credit score requirements.
  • Typically, the higher your credit score is, the lower an interest rate you will qualify for.

Strictly speaking, you don’t need a credit score to buy a house. If you’re paying cash, for example, no one necessarily cares whether you have good credit. However, if — like most aspiring American homeowners — you’ll need financing, then your credit score is crucial.

Your credit score is one of the most important factors lenders consider when you apply for a mortgage. Not just to qualify for the loan itself, but for the conditions: Typically, the higher your score, the lower the interest rates and better terms you’ll qualify for.

So, what is a good credit score to buy a house? It depends on the type of mortgage you’re seeking: Many loans vary when it comes to the credit score needed to qualify. Generally speaking, you’ll likely need a score of at least 620 — what’s classified as a “fair” rating — to qualify with most lenders. With a Federal Housing Administration (FHA) loan, though, you might be able to get approved with a score as low as 500.

Credit score needed to buy a house by mortgage type

There’s no single, specific credit score that will automatically qualify you for a mortgage (though having the maximum score of 850 certainly never hurts). However, while lenders might not set precise qualifying numbers, they do have minimum credit score requirements.

The minimum credit score to be eligible for a mortgage depends on both the lender and the type of loan.

Loan TypeMinimum Credit Score
Conventional loans620
FHA loans500 (with 10% down payment); 580 (with 3.5% down payment)
USDA loans640
VA loansThe VA has no minimum limit, but lenders generally like to see at least 620
Jumbo loans700
  • Conventional loans: Conventional loans are mortgages that aren’t offered or backed by a U.S. government agency; they’re offered by commercial banks and savings and loans associations. Generally, the higher your credit score, the more likely you’ll qualify for a mortgage loan with these lenders. Many will accept a credit score as low as 620, but they may have other requirements for those borrowers, such as a higher income or a larger down payment.
  • FHA loans: The Federal Housing Administration insures loans geared toward borrowers with lower credit scores and down payments, especially first-time homebuyers. You could qualify for an FHA loan with a credit score of 500 to 579 with a 10 percent down payment, or with a 3.5 percent down payment if your score is 580 or higher.
  • USDA loans: The U.S. Department of Agriculture guarantees this loan program for low- to moderate-income borrowers purchasing a home in a qualifying rural area. Borrowers generally need a minimum score of 640 to qualify for a USDA loan. In some cases, USDA lenders may consider a lower score with additional analysis of a borrower’s credit.
  • VA loans: Guaranteed by the U.S. Department of Veterans Affairs, VA loans are offered to active and veteran military personnel and their families. The government doesn’t have a minimum credit score requirement to qualify for VA loans, though many lenders — who actually extend the financing — require a minimum score of 620.
  • Jumbo loans: Jumbo loans are larger-than-normal-size mortgages; they exceed the conforming loan limits established by Freddie Mac and Fannie Mae — $766,550 in most markets, as of 2024. Many jumbo lenders require a credit score of 700 or higher to qualify because of the increased risk that comes with borrowing such a large amount.

What is a good credit score for buying a house?

When considering the best credit score to buy a house, many lenders use the FICO model for credit scores. It grades consumers on a 300 to 850 point range, with a higher score indicating less risk to the lender. FICO scores range as follows:

  • 800 or higher: Exceptional
  • 740-799: Very good
  • 670-739: Good
  • 580-669: Fair
  • 579 or lower: Poor

How your credit score affects your mortgage rate

Although it’s up to specific lenders to determine what score borrowers need to receive the lowest mortgage interest rates, a difference of just a few points on your credit score can sometimes affect your monthly payments substantially. For example, on a $300,000 mortgage, the difference in principal and interest payments between a 7 percent interest rate and a 6.5 percent rate is $99 per month. That comes out to more than $35,000 over the course of a 30-year mortgage term.

“A low credit score can make it less likely that you would qualify for the most affordable rates, and could even lead to rejection of your mortgage application,” says Bruce McClary, senior VP of communications for the National Foundation for Credit Counseling. “It’s still possible to be approved with a low credit score, but you may have to add a co-signer or reduce the overall amount you plan to borrow.”

A co-signer would be responsible for the debt, so it’s not always easy to get someone to agree. Plus, if you miss payments, it could damage your co-signer’s credit — and your relationship with them.

Here’s how much you’d pay at the current rates (as of January 2024) for each credit score range. These examples are based on national averages for a 30-year fixed mortgage loan of $300,000.

FICO ScoreAPR*Monthly PaymentTotal Interest PaidPrice Changes
*APRs as of Jan. 9, 2024. Source: myFICO.
760-8506.38%$1,873$374,133If your score lowers to 700-759, you could pay an extra $15,761
700-7596.602%$1,916$389,894If your score rises to 760-850, you could save an extra $15,761
680-6996.779%$1,952$402,569If your score rises to 700-759, you could save an extra $12,675
660-6796.993%$1,994$418,019If your score rises to 699-680, you could save an extra $15,450
640-6597.423%$2,082$449,465If your score rises to 660-679, you could save an extra $31,446
620-6397.969%$2,195$490,133If your score rises to 640-659, you could save an extra $40,668

Bankrate’s loan comparison calculator is a handy tool to help you see interest rates for credit scores. You can also use Bankrate’s mortgage APR calculator to run the numbers and see what your monthly mortgage payment might look like with different APRs.

Why your credit score matters to lenders

Your credit score helps lenders determine your ability or inability to repay the mortgage (and, subsequently, their risk). Lenders also examine your debt-to-income ratio (DTI), the percentage of monthly debt obligations relative to how much income you bring in.

To illustrate, if you earn $4,000 per month and have $1,250 in credit card bills, loan payments, housing costs and other debts, your DTI ratio would be 31 percent. The ideal ratio is typically less than 36 percent, though some lenders will accept more with a higher down payment.

Can I get a mortgage with a low credit score?

It is possible to get a mortgage with a low credit score, but you’ll pay higher interest rates and higher monthly payments. Lenders may be more stringent about other aspects of your finances, too, such as your DTI ratio.

Keep in mind that credit requirements vary from lender to lender. Shop around with multiple lenders to find one that will work with you.

How to improve your credit score to buy a house

Before you look at houses, it’s smart to check your credit score and pull your credit reports from the major credit agencies. Addressing credit issues early on can help you raise your score before you apply for a mortgage.

If your credit score isn’t great, there are still options. Instead of settling for the mortgage rates you currently qualify for, consider postponing homeownership and working to boost your credit score and improve your options. Here are some quick tips to help:

1. Check your credit report and correct any errors

Before applying for a mortgage, request a copy of your credit reports from the three major credit agencies: Experian, Equifax and TransUnion. You can access your credit reports from each bureau for free once per year. If you find inaccurate or missing information, file a dispute with the credit reporting agency and the creditor. Clearly identify each item you’re disputing and be sure to include supporting documents.

2. Pay down credit card balances

Your credit utilization ratio is the amount of debt you have compared with your available credit. To calculate this, divide the amount of debt into the amount of available credit. If you have $10,000 in debt and $20,000 in available credit, for instance, your credit utilization ratio is 50 percent. Lenders like to see credit utilization of 30 percent or less.

3. Pay all bills on time

Your payment history accounts for 35 percent of your credit score. While late payments stay on your credit report for seven years, their impact on your score diminishes over time.

4. Don’t close older credit lines after paying them off

Closing unused accounts sounds like a good idea, but it may raise your credit utilization ratio and cause your credit score to drop.

5. Don’t open any new lines of credit or take out large loans

Generally, the less debt you have, the better off you are when you apply for a mortgage. FICO recommends not opening new credit accounts to increase your credit utilization ratio, because each credit request can lower your score slightly. Once your credit has improved, it’s fine to rate-shop, but keep it within a 30-day window — spreading out the rate inquiries can hurt your score. You can also use Bankrate’s mortgage calculator to estimate your monthly mortgage payments.


  • Depending on the type of loan you are interested in borrowing, yes. Many conventional loans allow you to borrow with a ”fair” credit score of 620 or higher, though your interest rate may be higher than it would be with a higher credit score. FHA loans can allow scores as low as 500, but will require a higher down payment.

  • There are plenty of proactive steps you can take to improve your credit score. Start by checking your credit report to ensure the information is all up-to-date and accurate. Then focus on trimming down your debt, so that you are not borrowing more than 30 percent on any open lines of credit. In addition, avoid opening any new accounts, or closing any old ones, at least in the short-term.

  • Probably. Credit score is not the only factor at play when lenders look at mortgage applications, but generally, a higher credit score will allow you to secure a lower mortgage rate.

What Credit Score Do You Need To Buy A House? | Bankrate (2024)


What Credit Score Do You Need To Buy A House? | Bankrate? ›

For a conventional mortgage in California, you typically need a minimum score of at least 600. If you qualify for certain government-backed loans, however, you may be able to buy a home with a score as low as 500.

What is the minimum credit score to buy a house? ›

For a conventional mortgage in California, you typically need a minimum score of at least 600. If you qualify for certain government-backed loans, however, you may be able to buy a home with a score as low as 500.

Is a 600 credit score good enough to buy a house? ›

Some home loan options are specifically designed for borrowers with less-than-perfect credit — so technically, yes, 600 can be a good enough credit score to buy a house. However, you may face a few hurdles on the way to homeownership, including higher interest rates and additional costs.

What credit score is needed to buy a $300K house? ›

What credit score is needed to buy a $300K house? The required credit score to buy a $300K house typically ranges from 580 to 720 or higher, depending on the type of loan. For an FHA loan, the minimum credit score is usually around 580.

Is a 700 credit score good enough to buy a house? ›

Yes. Assuming the rest of your finances are solid, a credit score of 700 should qualify you for all major loan programs: conventional, FHA, VA and USDA loans all have lower minimum requirements, and even jumbo loans require a 700 score at minimum.

How much can I borrow with a 580 credit score? ›

You can borrow anywhere from a few thousand dollars to $100,000+ with a 580 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.

What credit score is needed to buy a house in FHA? ›

You must have a credit score of at least 500. Your DTI must be less than 57%. You must be able to put down a 3.5%-10% down payment. Mortgage lenders will have their own individual qualification standards and requirements.

Can I afford a 300K house on a 40k salary? ›

To purchase a $300K house, you may need to make between $50,000 and $74,500 a year. This is a rule of thumb, and the specific annual salary will vary depending on your credit score, debt-to-income ratio, type of home loan, loan term, and mortgage rate. Homeownership costs like HOA fees can also impact affordability.

How much income do I need for a 200K mortgage? ›

So, by tripling the $15,600 annual total, you'll find that you'd need to earn at least $46,800 a year to afford the monthly payments on a $200,000 home. This estimate however, does not include the 20 percent down payment you would need: On a $200K home, that's $40,000 that needs to be paid in full, upfront.

Can I afford a 300K house on a 60k salary? ›

An individual earning $60,000 a year may buy a home worth ranging from $180,000 to over $300,000. That's because your wage isn't the only factor that affects your house purchase budget. Your credit score, existing debts, mortgage rates, and a variety of other considerations must all be taken into account.

Is a 900 credit score possible? ›

Highlights: While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.

What is a good FICO score for a mortgage? ›

That's a FICO score of 670 or higher. The minimum credit score needed to buy a house can range from 500 to 700, but will ultimately depend on the type of mortgage loan you're applying for and your lender. Most lenders require a minimum credit score of 620 to buy a house with a conventional mortgage.

How much of a home loan can I get with a 720 credit score? ›

Best FHA Loan For Rates With 700 to 720 Credit Score

The interest rates you could get if your credit score is 700, 710, or 720 are some of the best available. In this range, based on a $250,000.00 FHA home loan, your monthly payment would be roughly $1,100.

What credit score is needed to buy a $400,000 house? ›

Your credit score has less bearing on your ability to get a mortgage than you might think. The minimum FICO score for a conventional loan is 620. The best rate comes with a score of 740 or higher.

Can I buy a house with a 580 credit score? ›

You can get a mortgage with a credit score as low as 620, 580 or even 500, depending on the type of loan. Some mortgage lenders offer bad credit loans with more flexible qualifying requirements but higher costs. Others offer free credit counseling to help you improve your score before applying for a loan.

Can I get a mortgage with a 650 credit score? ›

Can I get a mortgage with an 650 credit score? Yes, your 650 credit score can qualify you for a mortgage. And you have a couple of main options. With a credit score of 580 or higher, you can qualify for an FHA loan to buy a home with a down payment of just 3.5%.

What mortgage rate can I get with an 800 credit score? ›

Average rate by credit score
FICO ScoreNational average mortgage APR
660 to 6797.388%
680 to 6997.174%
700 to 7596.997%
760 to 8506.775%
2 more rows
May 2, 2024

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