Your Credit Score + Buying.
If you're planning to buy a home, one of the most important numbers you'll need to pay attention to is your credit score. It plays a critical role in whether you'll be approved for a mortgage loan, how much you can borrow, and what your interest rate will be.
But what’s the minimum credit score to buy a house? The answer depends on the type of loan you’re applying for and the lender’s specific requirements. Here's a breakdown of what you need to know.
1. What Is a Credit Score?
Your credit score is a three-digit number that reflects your creditworthiness — or how likely you are to repay your debts. It ranges from 300 to 850 and is calculated based on factors like your payment history, credit utilization, length of credit history, new credit, and credit mix.
Generally, the higher your score, the better your chances of getting approved for a home loan with favorable terms.
2. Minimum Credit Scores by Loan Type
Here’s a look at the minimum credit score requirements for common types of mortgage loans:
FHA Loans – These are popular among first-time homebuyers. The minimum credit score required is 580 with a 3.5% down payment. If your score is between 500 and 579, you may still qualify, but you'll need to put down at least 10%.
Conventional Loans – Backed by Fannie Mae or Freddie Mac, conventional mortgages usually require a minimum credit score of 620. However, better scores (740 and above) often qualify for lower interest rates and better terms.
VA Loans – For eligible veterans and active-duty service members, VA loans typically do not have a strict minimum credit score, but most lenders look for at least a 620.
USDA Loans – These loans, available for rural homebuyers, usually require a minimum score of 640.
3. Why Your Credit Score Matters
Lenders use your credit score to determine:
Whether you qualify for a mortgage
Your interest rate
Your loan terms
Your monthly mortgage payment
Even a small change in your score can have a big impact on your mortgage interest rate. For example, a buyer with a 760 credit score may receive a rate 0.5% lower than someone with a 620 score, potentially saving thousands over the life of the loan.
4. How to Improve Your Credit Before Buying a Home
If your credit score is lower than you'd like, don’t worry — there are ways to improve it:
Pay all your bills on time
Pay down credit card balances
Avoid opening new lines of credit before applying for a mortgage
Check your credit report for errors and dispute them if necessary
The bottom line is…
While the minimum credit score to buy a house varies by loan type, a higher score opens the door to better mortgage rates and more loan options. If you're thinking about becoming a home owner, now is the time to check your credit score, understand where you stand, and take steps to strengthen your financial profile.
Need help figuring out your next move? Talk with me today to learn what home loan options are right for your credit situation.
