What is the minimum credit score you need for a mortgage?

Your credit score can make or break your home buying experience. A first-time homebuyer or someone looking to refinance needs to know that their FICO score is a vital part of loan qualification and interest rate determination.

Different mortgage loans come with their own credit score requirements. Conventional loans usually require a strong FICO score in order to qualify for competitive rates. Government-backed options like USDA loans or FHA loans give more flexibility to borrowers with low credit scores. That said, mortgage lenders still set minimum thresholds to ensure borrowers can handle their monthly payments and don't end up over their head.

Getting a home loan requires you to know the credit score needed to buy a house. Typically, mortgage lenders accept scores between 620 to 850. Some specialized programs or mortgage lenders work with scores as low as 500. Your loan type and lender's criteria will determine the specific requirements.

This piece explores minimum credit scores for various mortgage types. You'll learn about other factors mortgage lenders think over beyond credit scores and practical ways to boost your score before applying for a home loan.

....in as little as 3 minutes – no credit impact

What credit score do you need to buy a house?

Your FICO® Score is crucial when mortgage lenders make mortgage decisions. This three-digit number is calculated using data from credit reports maintained by the three major credit bureaus: Equifax, Experian, and TransUnion. 

FICO scores range from 300 to 850 and shows mortgage lenders how creditworthy you are. A score of 740 or above stands out as very good, but you can still buy a home with a lower score.

Most mortgage types need a minimum credit score of 620. This baseline mainly applies to conventional loans - the most popular mortgage choice. All the same, different loan types come with their own credit requirements:

Conventional loans

Conventional loans need scores of 620 or higher, though some mortgage lenders prefer 660+ to give better terms. You can learn more about conventional loan requirements to see if this path works for you.

FHA loans

Government-backed FHA loans give you more flexibility. They accept scores as low as 580 with a 3.5% down payment. Scores between 500-579 work too, but you'll need a 10% down payment. Here you can learn more about FHA loan requirements.

Jumbo loans

Jumbo loans let you borrow more than the conforming loan limits, which is ideal for high-value homes. Because they’re not government-backed, mortgage lenders often require a strong credit score (typically 700 or higher), a low debt-to-income ratio, and a larger down payment—usually at least 10–20%. Learn more about jumbo loan requirements here.

VA loans

VA loans are a great option for eligible veterans, active-duty service members, and some surviving spouses. Backed by the Department of Veterans Affairs, they require no down payment and no private mortgage insurance (PMI). Most mortgage lenders look for a credit score of at least 620, but VA loans are known for their flexible guidelines. Check out VA loan rates here.

Note that perfect credit isn't needed to buy a home. People with average or below-average credit scores become homeowners successfully every day.

....in as little as 3 minutes – no credit impact

Other factors to consider for a mortgage approval

While better credit scores usually mean lower interest rates, mortgage lenders look beyond it to get a more holistic view of your financial profile. Lenders review your income, job history, and debt-to-income ratio. They also look at your requested mortgage amount and down payment.

Income and employment history

Your income and employment history gives mortgage lenders a clear picture of your financial stability. A consistent job record shows you're reliable, while job-hopping might make mortgage lenders nervous. Most lenders want to see you've stayed in the same field for at least two years, though they sometimes make exceptions.

Debt-to-income ratio (DTI)

Debt-to-income ratio (DTI) is a vital number that lenders inspect closely. This percentage shows how your monthly debt payments stack up against your gross monthly income. A DTI of 43% or lower is what most lenders prefer, though some loan programs accept higher ratios.

Down payment

The size of your down payment affects your chances of approval. Putting more money down usually gets you better loan terms because it reduces the lender's risk. With conventional loans, a 20% down payment helps you skip private mortgage insurance. FHA loans need just 3.5% down if you have qualifying credit scores.

Credit activity

Your recent credit activity plays a big role in approval decisions. Here's what you should avoid while applying for a mortgage:

— Opening new credit cards
— Closing existing credit accounts
— Applying for additional loans
— Co-signing for others' loans

These actions can drop your score temporarily and worry lenders. Rate shopping is different though - multiple credit checks within a short timeframe usually count as one inquiry.

A mortgage calculator helps you see how these factors shape your potential mortgage. You can compare different scenarios based on your finances and figure out what you can actually afford.

....in as little as 3 minutes – no credit impact

How do you improve your credit score before buying a house?

Your mortgage application stands a better chance of approval with a higher credit score. Taking steps to boost your score before applying can save you thousands in interest payments over your loan's lifetime, rather than just hoping to meet minimum requirements.

Pay off your debt

Your credit score rises when you reduce your debt load. The best place to start is with high-interest credit card balances since they have the biggest effect on your score. The "debt avalanche" method works well - make minimum payments on all debts while putting extra money toward your highest-interest debt.

This strategy helps improve your credit utilization ratio, which makes up about 30% of your FICO® Score. The goal is to keep utilization under 30% of available credit on each card and all accounts combined.

Pay your bills on time

Late payments hurt your credit score more than anything else. Payment history makes up about 35% of your credit score calculation, making it the most important factor.

Your best defense is automatic payments or calendar reminders to stay on top of due dates. A single 30-day late payment can lower your score by 80+ points and stay on your credit report for seven years.

Increase credit limit

Your utilization ratio can improve when you request higher credit limits, as long as your spending stays the same. It's better to ask your existing creditors for limit increases instead of opening new accounts before applying for a mortgage.

Your mortgage approval chances will improve if you avoid these credit-damaging moves:

— Opening new credit cards
— Closing existing credit accounts
— Applying for new loans
— Co-signing for others' loans

Look through your credit reports from all three credit bureaus to find errors or outdated information. The credit bureaus allow you to dispute any inaccuracies directly.

To learn more about credit score requirements, check our guides on conventional loan requirements and FHA loan requirements to find the best path for your situation.

Conclusion

Credit score requirements play a key role if you want to buy a home. You'll need scores of 620 or higher for conventional loans, while FHA loans work with scores as low as 500. The exact threshold depends on your situation and the type of loan you choose.

Your credit score isn't the whole story. Lenders look at other factors too - your debt-to-income ratio, job history, and how much you can put down. Strong numbers in these areas might help balance out a credit score that's not perfect.

Good news for first-time buyers - special programs exist to help those with credit challenges. Getting mortgage rates from several lenders is vital since each one has different rules and options.

Here's something worth knowing - better credit scores lead to better deals, no matter where you start. Even a small boost in your score could save you thousands over time. You can lift your score within months by paying down debt, never missing payments, and watching your credit use closely.

Take time to review both conventional loan requirements and credit score thresholds for different loans before you decide. A mortgage calculator helps you see what your payments might look like based on your finances.

You don't need perfect credit to buy a home. People with average or below-average scores buy houses every day. You can make your way to homeownership even if your credit history isn't spotless.

....in as little as 3 minutes – no credit impact