Keeping Score

What credit score is needed to buy a house?

The higher your score is, the less you’ll pay in interest charges, so be careful about applying for new cards and avoid credit missteps


While every lender has its own minimum score requirements, generally speaking your score must be at least 500. But those in the 500 to 619 range will find mortgage rates that are significantly higher than the lowest current rate.

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At the beginning of any new year, the subject of homeownership often comes up. And after a year of remaining largely inside, you might even be more inclined to take the plunge. And with interest rates at historic lows, you might be able to score great terms.

There are a lot of things to consider before you jump into the homeownership pool, but one thing you definitely want is a good credit score.

Check out all the answers from our credit card experts.

Ask Steve a question.

What credit score is needed to buy a house?

In general terms, the bare minimum score required to get a mortgage is 500. But 500 is not a good score and often points to underlying problems in a person’s financial past. It could also be that a 500 score may simply be the result of a very thin file. While a loan might be available with a 500 credit score and at least 10% down, I suggest waiting until you have at least a 620 FICO score before attempting to buy a home.

See related: Can you get approved for a home loan with a credit score?

Scores of 620 to 640 are generally the accepted “minimum” score required for most types of loans. But, the lower the score, the worse the terms you will qualify for, and scores under 640 are not going to get you the best terms. This is true for any financial product, but especially mortgages.

Credit score needed by loan type

If your score is below 580, you’ll need an FHA loan to get a mortgage. This is a loan through the U.S. Federal Housing Administration, backed by FHA insurance and administered through an FHA lender. The FHA doesn’t actually lend the money: Approved lenders do that. These loans are intended for borrowers with low-to-moderate income, offering lower credit score requirements and down payments than most other lenders. First-time home buyers often tap into the FHA loan because of these reduced requirements.

Veterans may also qualify for a VA loan through the U.S. Department of Veterans Affairs. These loans also offer low or even no down payment options. While there is no set minimum score, most require a score of at least 620, but some may allow a score as low as 580.

If you live in a designated rural area, you may be eligible for a USDA loan through the U.S. Department of Agriculture. These loans have fairly stringent guidelines with regard to household income as well as the property itself but has no set minimum score. However, a score of at least 640 is generally required.

If these options aren’t available to you, you’ll need to look into a conventional loan. Conventional loans generally have a minimum credit score requirement of 620 to 640, but as with everything else, these scores are not going to afford you the best rates or even guarantee that you will be accepted. Scores in the 670 to 739 stand a better chance of approval, but again the rates will probably not be the best. Where you would most like to be in this category is 740+.

See related: Can you pay your mortgage with a credit card?

What credit scores do mortgage lenders use?

FICO scores aren’t the only credit scores, but they are the most common. And, they’re what most mortgage lenders will use to evaluate applications. But remember that FICO offers scores, depending on what lenders need. So the FICO score a credit card issuer uses will be different from the one a mortgage lender uses.

How to manage your credit when applying for a mortgage

I always recommend people give themselves six months to a year to get their credit in its best shape before shopping for a mortgage.

Check your credit 

Pull your credit reports from all three bureaus at Right now, you can access a free credit report from each bureau weekly. After April 2021, you will be able to access these free reports once a year.  Look over each report carefully and identify any errors or problems you see.

Correct any errors

If there are errors, work with the bureau to have them corrected. This may take weeks or months, or even longer in the case of identity theft.

Fix any problems

If you see any derogatory marks, you will need to correct them to get the best terms. Any past due items or items you may have in collections will pull your score down and could result in a much higher interest rate or even an outright denial. Most derogatory marks stay on your credit for seven years, but they will have less of an impact on your score over time – assuming you make payments on time and keep any bills out of collections.

Keep your debt low

If you’re hoping to get a mortgage soon, you’ll want to keep your debt as low as possible and pay off any existing balances because credit utilization accounts for 30% of your credit score.

Try not to open or close any accounts

Both opening and closing credit card accounts can lower your score. Usually, it’s only temporary, but when you’re looking for a mortgage, you want your score to be as good as possible. So unless you have a good reason to open or close an account, it’s best to wait.

Bottom line

Buying a house is one of the most important decisions you will make. Putting your best credit foot forward is vital to securing the best terms, which will likely be with you for years to come.

Remember to keep track of your score!

See related: Building a mortgage-worthy credit profile

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The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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