What’s A Good Credit Score To Buy A House? | Quicken Loans (2024)

Credit scores can be a confusing topic for even the most financially savvy consumers. Most people understand that a good credit score boosts your chances of qualifying for a mortgage because it shows the lender you’re likely to repay your loan on time. That’s why many lenders require minimum credit scores for loans.

But do you know the minimum credit score you need to qualify for a mortgage to buy a house? And did you know the minimum credit score to qualify can vary depending on the mortgage you want?

To buy a house with a conventional loan, for example, you’ll need at least a 620 credit score. But don’t worry. Even if your credit score hovers somewhere in the 500 – 600 range, you can still secure a home loan.

While every lender is different, knowing your score and how it may impact your loan application is key.

What’s A Good Credit Score To Buy A House? | Quicken Loans (1)

Home Buyer’s Guide

Follow our step-by-step guide to learn how to buy a home.

What Credit Score Is Needed To Buy A House?

The minimum credit score you need to qualify for a mortgage depends on the type of home loan you’re trying to obtain.

Type Of Loan

Minimum FICO® Score

Conventional loan

620 (Federal Housing Financing Agency requirement)

Federal Housing Administration (FHA) loan with a 3.5% down payment

580 (FHA requirement)

FHA loan with a 10% down payment

500 (FHA requirement)

Department of Veterans Affairs (VA) loan

No VA minimum requirement. Most lenders require a 580 credit score or higher.

U.S. Department of Agriculture (USDA) loan

No USDA minimum requirement. Most lenders require a 640 credit score or higher.

Jumbo loan

Most lenders require a 680 credit score or higher.

Conventional Loans

Conventional mortgages are home loans that follow the standards set by Fannie Mae and Freddie Mac. They typically offer competitive interest rates and flexible mortgage repayment terms that range from 8 to 30 years. Conventional loan financing is typically best for borrowers with good or excellent credit because they require a higher credit score than government-backed loans.

To secure a conventional loan to buy a house, most lenders typically require a minimum credit score of 620. However, the final decision on what works as a qualifying credit score will rest with the lender. Some lenders will let you buy a home with a 620 credit score, and others may require a higher minimum credit score.

FHA Loans

The Federal Housing Administration insures FHA home loans. Lenders are more willing to approve borrowers who would have struggled to meet conventional mortgage requirements because the loans are insured by the FHA.

With down payments as low as 3.5%, FHA loans help prospective home buyers with lower credit scores and smaller amounts saved to make a down payment.

To qualify for an FHA loan that requires a 3.5% down payment, you’ll need a minimum credit score of 580. If you can make at least a 10% down payment, you may qualify for an FHA loan with a 500 credit score.

Keep in mind that FHA loans are issued by private lenders, and lenders may set minimum credit score requirements.

VA Loans

A VA home loan, insured by the Department of Veterans Affairs, may assist your homeowning aspirations. VA loans don’t require a down payment, and they’re available to borrowers with lower credit scores.

To qualify, you must be an eligible member or veteran of the U.S. armed forces, a member or veteran of the U.S. Army Reserves or National Guard or a surviving spouse to apply for a VA loan.

The VA has no minimum credit requirement, but many lenders require borrowers to have a minimum credit score of at least 580.

USDA Loans

The U.S. Department of Agriculture offers USDA home loans to promote rural development. To qualify for this type of mortgage, you must purchase a single-family residence in an eligible rural location. And your household income can’t be more than 115% of the area’s median household income.

The USDA doesn’t set a minimum credit score requirement for home buyers, but lenders can require one. Many lenders require a credit score of 640 or higher for initial approval. However, depending on the situation, you may be approved with a lower credit score.

Jumbo Loans

A jumbo loan is similar to a conventional mortgage, except the loan amount for a jumbo loan exceeds the conforming limits set by the Federal Housing Finance Agency (FHFA).

To be approved for a jumbo loan, borrowers typically need a low debt-to-income ratio, a high credit score and a substantial amount of cash reserves.

Since jumbo mortgages allow a high loan amount, lenders can be stricter about their minimum credit score requirements. For example, you may need a 740 credit score if you choose a fixed or adjustable-rate 15-year jumbo loan. But you may qualify for a 30-year fixed-rate jumbo loan with a 680 credit score.

See What You Qualify For

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Factors That Go Into A Credit Score

It’s important to know your credit score and understand what affects it before you begin the mortgage process. Once you know how it all works together, you can build your credit score or maintain it to give yourself the best chance of qualifying for a mortgage.

While exact scoring models may vary by lender, some variation of the standard FICO® Score is often used as a base. FICO® pulls variables from the three major credit bureaus (Equifax®, Experian™ and TransUnion®) from your credit reports and compiles your score. FICO® Scores range from 300 – 850 and are based on:

  • Payment history
  • Amount owed
  • Length of credit history
  • Types of credit
  • New credit

The higher your score, the easier it should be to qualify for a lower interest rate on a great mortgage.

Additional Factors Lenders Consider For A Mortgage

Your credit score is a key factor in determining whether you qualify for a mortgage. But it’s not the only factor lenders consider. Your mortgage lender will also evaluate your:

  • Income: Lenders verify your income before approving you for a mortgage. They want to make sure you make enough money each month to afford all your payments.
  • Debt-to-income ratio (DTI): Depending on the type of mortgage you use, lenders want your total monthly debts, including your new estimated mortgage payment, to apply to no more than 50% of your gross monthly income. If your debt-to-income ratio is higher, you may struggle to qualify for a mortgage.
  • Down payment: The bigger your down payment, the more likely it is that you’ll qualify for a mortgage with a lower interest rate. That’s because lenders believe borrowers are more likely to make regular payments after investing a significant amount of their money into the loan.
  • Savings: Lenders want to make sure you have reserve funds to continue to make your mortgage payments if your income unexpectedly dries While not all lenders require it, some lenders may require borrowers to have a reserve fund of 1­ – 12 months of mortgage payments saved depending on the terms of the loan and the type of mortgage.
  • Employment history: Lender requirements may vary, but they usually want to see that you’ve worked at the same job or industry for at least 2 years.

Take the first step toward the right mortgage.

See what you can afford.

How To Improve Your Credit Score Before Buying A House

Fortunately, credit scores aren’t static – you can improve them. Be aware, though, that there are no quick fixes. It takes time to build up a low credit score.

Take these steps to help boost your credit score before filling out a mortgage application:

  • Check your credit report for errors: Order one copy of each of your three credit reports (maintained by Experian®, Equifax™ and TransUnion®) each year from AnnualCreditReport.com. Once you get the reports, check them for errors.
  • Become an authorized user: A family member may help you boost your credit score by adding you as an authorized user to a credit card account. Don’t run up debt on this card, though. If you do, you can hurt your family member’s credit score.
  • Pay your bills on time: Paying your bills on time each month is the surest way to steadily improve your credit score.
  • Pay down your credit card debt: Paying down credit card debt is another way to steadily improve your score. But don’t close the credit card account once you pay it off.

What’s A Good Credit Score To Buy A House: FAQs

If you have additional questions about the best credit score to buy a house, we have answers.

The lowest credit score that will qualify you for a mortgage depends on the type of home loan you use and the lender’s requirements.
For a conventional mortgage, the typical minimum credit score is 620, but you may be able to secure financing with a lower credit score.

You may qualify for a mortgage with a low credit score. However, your lender may charge a higher interest rate, and the underwriting process may be more involved. If you’re trying to buy a home with a low credit score, making a larger down payment or recruiting a co-borrower can help.

Your credit score not only qualifies you for a mortgage. It also helps to determine your interest rate and loan terms. Taking the time to improve your score can help you land a better interest rate and a longer repayment term. Fixing a credit score takes time. You should be cautious if anyone offers to improve your credit score overnight.

The Bottom Line

The credit score required to buy a home may differ based on the type of loan you’re applying for. But, no matter what type of financing you’re thinking about, the higher your credit score is, the easier it should be to get a better interest rate on your mortgage.

Find A Mortgage Today and Lock In Your Rate!

Get matched with a lender that will work for your financial situation.

What’s A Good Credit Score To Buy A House? | Quicken Loans (2024)

FAQs

What’s A Good Credit Score To Buy A House? | Quicken Loans? ›

It's recommended you have a credit score of 620 or higher when you apply for a conventional loan. If your score is below 620, lenders either won't be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly mortgage payments.

What's a good enough credit score to buy a house? ›

It's recommended you have a credit score of 620 or higher when you apply for a conventional loan. If your score is below 620, lenders either won't be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly mortgage payments.

How high of a credit score do I need to get a home loan? ›

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.

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. There is no particular advantage to having a score of 800, although it is, of course, laudable.

Is a 720 credit score good enough to buy a house? ›

Home loans

Assuming you have enough income, a 720 credit score is likely high enough to help you get a government-backed mortgage such as an FHA for VA loan. However, it's probably not high enough to get the lowest interest rates available.

How much money can I borrow with a 700 credit score? ›

You can borrow from $1,000 to $100,000 or more with a 700 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 with no money down? ›

You'll usually need a credit score of at least 640 for the zero-down USDA loan program. VA loans with no money down usually require a minimum credit score of 580 to 620. Low-down-payment mortgages, including conforming loans and FHA loans, also require FICO scores of 580 to 620.

What is a good credit score by age? ›

How Credit Scores Breakdown by Generation
Average FICO 8 Score by Generation
Generation20222023
Generation Z (ages 18-26)679 - Good680 - Good
Millennials (27-42)687 - Good690 - Good
Generation X (43-58)707 - Good709 - Good
2 more rows

What credit score is needed for 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.

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.

How much income do you need to buy a $250,000 house? ›

If you follow the 2.5 times your income rule, you divide the cost of the home by 2.5 to determine how much money you need to earn annually to afford it. Based on this rule, you would need to earn $100,000 per year to comfortably purchase a $250,000 home.

How much income do you need to buy a $300 000 house? ›

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 salary will vary depending on your credit score, debt-to-income ratio, type of home loan, loan term, and mortgage rate.

How much income to afford a $400,000 home? ›

The annual salary needed to afford a $400,000 home is about $127,000.

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

You can borrow $50,000 - $100,000+ with a 720 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.

How rare is a 720 credit score? ›

Who Has a 720 Credit Score?
Credit ScoreTierPercentage of Americans
720 – 850Excellent38.12%
660 – 719Good17.33%
620 – 659Fair/Limited13.47%
300 – 619Bad31.08%

How far back do banks look for mortgages? ›

How far back do lenders look at bank statements? Mortgage lenders typically seek two months of recent bank statements during your home loan application process. You need to provide bank statements for any accounts holding funds you'll use to qualify for the loan, including money market, checking, and savings accounts.

Can you buy a house with a 600 credit score? ›

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.

Can I purchase a home with a 700 credit score? ›

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.

Is a 750 credit score good for a house? ›

A 750 credit score generally falls into the "very good" range, which shows lenders that you're a very dependable borrower. People with credit scores within this range tend to qualify for loans and secure the best mortgage rates.

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