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What credit score is needed to buy a house?

Most loans require a score between 500 and 620

Profile picture of Jessica Render
by Jessica Render ConsumerAffairs Research Team
woman looking at credit score

If you’re thinking about buying a house, you’ve no doubt spent time considering your credit score. It can often seem like so much is riding on this one number — while your credit report and score are important, credit history isn't all lenders look at when making a decision about your loan.

To make matters more complicated, there’s no one number that lenders use as a measure of a “good” score, though there are general guidelines that are helpful to keep in mind. No two lenders are the same, so if you’re shopping for a home loan, be sure to get estimates from at least two or three lenders to see what kind of terms they can offer you.

What is a good credit score to buy a house?

A credit score of 720 should be enough to get you approved for a loan with a good (but maybe not the best) interest rate.

Scores in the mid- to upper-600s will likely come with a higher interest rate and potentially require a larger down payment. On the other hand, borrowers with the highest scores will be able to lock in the lowest interest rates. To achieve this, you’ll typically need a score of around 760 or higher.

Credit score minimum requirements are typically 500 to 620.

Base FICO credit scores, used by many lenders, range from 300 to 850 and fall into brackets ranging from poor to excellent. Here’s the current breakdown of how FICO categorizes each credit score range:

  • Poor: Below 580
  • Fair: 580 to 669
  • Good: 670 to 739
  • Very good: 740 to 799
  • Exceptional: 800 and above

Even if you have “bad credit” due to past credit card usage or other credit report flops, there are still plenty of paths to homeownership. Those with lower scores might qualify for FHA loans, USDA loans and VA loans. These are government-backed loans that take the financial risk off the lender and make it more likely for high-risk borrowers to get approval.

What is the minimum credit score to buy a house?

Different loan types carry different minimum credit score requirements, but credit score minimums for home loans typically range from 500 to 620. Here are the credit score requirements for the most common home loans.

Mortgage loan typeMinimum credit score
Conventional loan620
FHA loan500 to 580
VA loanVaries by lender; typically low- to mid-600s
USDA loanVaries by lender; typically around 580
Jumbo loanVaries by lender; typically around 680

You can find mortgage lenders near you and submit a pre-qualification request for more information about minimum score requirements. If you have a very low credit score, you might have a better chance of qualifying if you’re able to offer a higher down payment (typically around 10% or more of the home’s purchase price).

How does credit score affect mortgage rates?

Your credit score affects more than just your application approval. It also determines the interest rate attached to your home loan. With a higher credit score, you can get a lower interest rate. Interest rates vary depending on the housing market and other factors, but at the time of publishing, the average interest rate is below 3% for borrowers with a credit score above 700 and as high as 4.3% for those with scores below 640.

While this difference might seem minor, it can add up to significantly higher costs in your monthly mortgage payment and over the life of the loan. For example, on a 30-year mortgage of $285,000, the difference between an interest rate of 3% and 4.3% is around $208 per month. This amounts to nearly $75,000 over the life of the loan.

If your credit score is on the lower end of the spectrum, it’s wise to take steps to improve your score before applying for a loan. This will unlock better interest rates and keep your costs as low as possible.

What else do mortgage lenders consider?

While your credit history is an essential piece of the puzzle, it’s important to know the other factors mortgage loan lenders look at as they assess your merit as a borrower.

  • Debt-to-income ratio (DTI): Your DTI tells lenders how much of your gross monthly income goes toward repayment of debt. Lenders generally look for a number below 36% or 42%, meaning less than 36% or 42% of your gross monthly income goes toward debt payments. This shows lenders that you have enough money to make your mortgage loan payment each month. DTI is calculated by dividing your total monthly debt by your total gross monthly income. Debt includes things like your mortgage or rent, existing loan payments like student loans and car loan payments and any consumer debt like credit cards. Note that monthly payments like utilities, groceries or memberships are not included in this calculation.
  • Down payment: A larger down payment can help offset the effects of a lower credit score. By putting more of your own money down, you show the lender you’re willing to invest a large sum of money in the home, making it less likely you’ll default later on. It also lowers the total amount they’re lending to you, reducing their overall risk.
  • Employment history: Most lenders require at least two years of consistent employment in the same field, though you’re unlikely to see salary requirements. Steady employment shows a lender you have a reliable stream of income and that you aren’t at risk of losing your job and defaulting on your loan. It’s OK to have switched to a new employer within the same line of work (like moving from one school district to another), but any gaps in employment must be explained.
  • Savings and assets: Showing additional savings or assets in the form of investments or retirement can help you look less risky to a lender. It not only shows you’re responsible and have the ability to save, but it also proves you have access to additional funds should your income be reduced or if you have trouble paying your mortgage.

Bottom line

Overall, your credit score is an indication of your overall credit and debt habits and is represented by a number — usually between 300 and 850. The higher your score, the better your credit. For a conventional loan, most private lenders are looking for a score of at least 620. Generally, borrowers with scores above the mid-700s have the best odds of getting a low interest rate and good terms on their home loans. Those with fair to poor credit scores will have a harder time qualifying for a mortgage — and, if approved, they’re not likely to get the lowest rates available.

If you aren’t sure what your credit score is, learn how to check it. This will help you identify which type of home loan is best for you. You can also take steps to improve your credit score over time. You might even consider working with a credit repair company.

Once your score meets your goal, contact mortgage lenders in your area to see which loan options and interest rates you qualify for.

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Profile picture of Jessica Render
by Jessica Render ConsumerAffairs Research Team

As a member of the ConsumerAffairs research team, Jessica Render is dedicated to providing well-researched, valuable content designed to help consumers make informed purchase decisions they can feel confident making. She holds a degree in journalism from Oral Roberts University.