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What Credit Score Do You Need To Buy A House?

Getting the best deal on your mortgage requires a good credit score. But, it’s not impossible to buy a home with poor credit. Here’s what credit score you need to buy a home.

If you’re like most people, you’ll probably start your home ownership journey with a mortgage loan. Most people can’t afford to pay for a home up front due to the high costs involved, yet home-ownership is a priority for many.

In fact, mortgage debt is the single most significant form of debt among U.S. consumers amounting to $14.9 trillion according to the latest statistics. However, securing a mortgage isn’t always easy.

How hard is it to get a mortgage?

Although lenders consider your income, savings, and existing debt before they give you a mortgage loan, your credit score is undoubtedly the most critical determining factor. Your mortgage loan is ultimately approved or rejected based on your credit score.

The importance of checking your credit score regularly can’t, therefore, be overlooked if you are looking to buy a house. According to Credit Sesame, their members with conventional real estate mortgage loans have an average credit score of 682. Those with FHA mortgages have an average credit score of 649 while those who don’t have a mortgage or FHA loans have an average credit score of 613. Read our Credit Sesame review.

Now, obviously, lenders are going to look beyond your credit score when approving a loan (more on this below) so it’s not like you can ignore other factors.

Things like your income, your current overall debt load, other mortgages you hold, and many other factors impact your ability to get a mortgage. But so many of these factors tie into your credit score, which is why it’s such a central focus when making a lending decision.

How to know how much home you can afford

Choosing to buy a home is a big deal, and waiting until your credit score is perfect can cost you in the long run. So if you’re currently renting and you’re considering buying a home, it’s time to do some math.

Don’t worry, we won’t make you work too hard—just check out our rent versus buy calculator and it will do the work for you.

What is the minimum credit score mortgage lenders are looking for?

The minimum credit score required to buy a home isn’t cast in stone. It can change depending on a lender and economic conditions, among other factors. It’s common for lenders to tighten restrictions during a recession. During the housing market collapse, for instance, mortgage lenders were rejecting applications from applicants with 720 and above (which is considered a good credit score).

In case you are wondering how credit scores are categorized, individuals with a score of 750 and above are considered to have excellent creditworthiness. 700 to 749 is deemed to be good, 650 to 699 is fair, 550 to 649 is poor while 550 and below is bad. You can learn more about FICO scores here.

Conventional home loans backed by government-sponsored mortgage loan companies Freddie Mac or Fannie Mae offer mortgage loans to applicants with a credit score of 620 and above. FHA loans can be taken by applicants with a minimum score of 580. Individual lenders can increase the bar based on factors like income and the amount of down payment made. In general, you should be able to secure a mortgage loan in the U.S. if you have a credit score of 600 and above.

What credit score do mortgage lenders use?

The FICO score by Fair Isaac Corporation is a popular scoring model in the mortgage industry. 90 percent of mortgage loan lenders use the FICO score to determine the credit scores of borrowers and whether or not they will approve loans.

Your FICO score is determined by your payment history (35 percent weight), credit utilization (30 percent weight), length of credit history (15 percent weight), type of credit (10 percent weight), and the number of inquiries (10 percent weight). 

There are alternatives to the FICO score such as the VantageScore developed by the three major credit bureaus: Equifax, Experian, and TransUnion. The VantageScore considers factors like payment history, the age of accounts, and amount you owe. Both the FICO and VantageScore range between 300 and 850.

Other factors considered by mortgage lenders

Employment and income

Besides credit scores, mortgage lenders also consider your employment and income to ensure you are capable of meeting your repayment obligation every month.

Home buying location

Another, often overlooked consideration, is the location where you intend to buy a home. This consideration is vital since outside factors can increase risk, which in turn increases credit score requirements.

As you can see, there are numerous factors considered by mortgage lenders so you shouldn’t take home ownership lightly especially when you need financing.

How do you buy a home with bad credit?

If you want a mortgage loan but your credit score isn’t high, you may be required to have a larger-than-normal down payment or risk getting your loan application declined. Although lousy credit decreases your odds of securing a loan, it shouldn’t be an obstacle. There are home loans available for individuals with bad credit, too.

You just need to put in more money and effort. Even in cases where an applicant has faced bankruptcy or foreclosure, it is possible to secure a home loan thanks to mortgage programs by the government.

Important home-buying tips to consider when you have bad credit

I know people who have qualified for home loans despite failing to meet the minimum credit score required. Here’s what you should do if you fall into this category.

Tip 1: Get organized

If you have bad credit, your mortgage lender will want to see some documents before they approve your loan.

The documents include:

  • bank statements
  • pay stubs
  • tax returns for the previous year
  • investment/retirement account statements
  • list of debts, the amount owed, etc.

You should get these documents in order before you visit your lender since they act as proof that you are capable of paying your bills in time while repaying your debts and saving some money.

Tip 2: Get a co-signer

Your mortgage lender may not be satisfied with the documents you provide for some reason. For example, maybe your expenses are too high.

In this case, you need a co-signer, which is simply anyone with a good credit score that is capable of meeting your home loan repayment obligation should you face difficulties or default on your loan.

Tip 3: Take an FHA loan

FHA loans are home loans secured/insured by the federal government. FHA loans have lower requirements than traditional loans. In fact, you can apply for an FHA loan even if you have a foreclosure or bankruptcy in your credit report.

The loans also require a tiny down payment—as low as 3.5 percent compared to the 20 percent required with typical loans.

Can I buy a home with no credit?

You can lack a credit history for several reasons. For instance, if you have never taken a loan (always paid everything with cash), you won’t have a credit history. The same applies to individuals who change names and credit lines (i.e., because of divorce).

It’s challenging securing any loan without a credit history; however, it isn’t impossible. You can get an FHA loan if you don’t have credit but you may have to part with a more substantial down payment.

Alternatively, you can build your credit history fast. Getting a secured credit card is the easiest way to start building credit. You can start with a low credit limit and slowly build up a higher credit line with a lower APR.

Currently, our favorite secured card is the Capital One® Secured Mastercard®.

Where to find a mortgage

Now that you have an understanding of what it takes to get a mortgage loan, it’s time to figure out where you should actually go to do it.

Credit union

If you’re more traditional, you can go to your local bank or credit union and sit down to talk to a mortgage loan officer. For some, this is the best option.


A newer, and often more time and cost-efficient method is through using an online lender. To make your life even easier, visit our partner, LendingTree. LendingTree is a mortgage loan aggregator, meaning they can find a bunch of different rates for you and show them all in one place. 


In a nutshell, you don’t need a credit score to buy a house. There are many options to consider from getting a co-signer to considering FHA loans. As you can see, your credit score does play a significant impact in accelerating the process, though. If you have good credit, the process will be more straightforward, so focus on building your credit score before looking into buying a home to make your life a lot easier.

About the author

Chris Muller

Chris Muller

Chris has an MBA with a focus in advanced investments and has been writing about all things personal finance since 2015. He’s also built and run a digital marketing agency, focusing on content marketing, copywriting, and SEO, since 2016.

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