Buying a home is one of the most significant financial decisions you’ll ever make, and your credit score plays a crucial role in determining whether you qualify for a mortgage and the interest rate you’ll receive.
If you’re wondering what credit score you need to buy a house, you’re not alone. Many first-time homebuyers worry about whether their credit is strong enough to secure a loan.
In this guide, we’ll break down:
✔ Minimum credit score requirements for different types of home loans
✔ How your credit score impacts mortgage interest rates
✔ Actionable strategies to improve your score before applying
✔ Additional mortgage approval factors lenders consider
By the end of this article, you’ll have a clear roadmap to securing a home loan with the best possible terms.
What is a Good Credit Score to Buy a House?
Your credit score is a three-digit number ranging from 300 to 850 that represents your creditworthiness. Mortgage lenders use this score to assess your risk level and determine your eligibility for a home loan.
Here’s a breakdown of credit score ranges and their impact on mortgage approval:
Credit Score Range |
Rating |
Mortgage Eligibility |
| 300 – 579 | Poor | Difficult to qualify; may require subprime lending |
| 580 – 669 | Fair | Eligible for FHA, VA, and some conventional loans |
| 670 – 739 | Good | Better loan options and competitive rates |
| 740 – 799 | Very Good | Access to low interest rates and better terms |
| 800 – 850 | Excellent | Best interest rates and mortgage approval terms |
🔹 Key Insight: While 580–620 is the minimum for most mortgages, a score of 700+ will unlock better interest rates and save you money over time.
Minimum Credit Score Requirements by Loan Type
Different mortgage programs have varying credit score requirements. Here’s what you need to know:
1. FHA Loans (Best for First-Time Buyers)
- Minimum Credit Score: 500 (with 10% down) or 580 (with 3.5% down)
- Best For: Buyers with lower credit scores and smaller down payments
- Key Benefits: Easier approval, government-backed security
- Considerations: Mortgage insurance premium (MIP) required
2. VA Loans (Best for Veterans and Active Duty Service Members)
- Minimum Credit Score: No official requirement, but 580+ preferred
- Best For: Military members, veterans, and eligible spouses
- Key Benefits: No down payment, no private mortgage insurance (PMI)
- Considerations: Must meet service eligibility requirements
3. Conventional Loans (Best for Buyers with Good Credit)
- Minimum Credit Score: 620
- Best For: Buyers with stable income and decent credit
- Key Benefits: Lower interest rates with higher credit scores, no upfront mortgage insurance
- Considerations: Higher down payment needed for best rates
4. USDA Loans (Best for Rural Homebuyers)
- Minimum Credit Score: No set minimum (640+ preferred)
- Best For: Low- to moderate-income buyers in eligible rural areas
- Key Benefits: No down payment required, lower mortgage insurance costs
- Considerations: Income and location restrictions apply
🔹 Key Insight: FHA loans have the lowest credit score requirement, while conventional loans require a minimum of 620 but offer better long-term savings.
How Credit Scores Affect Mortgage Interest Rates
Your credit score directly impacts your mortgage rate. A higher score means a lower interest rate, which translates to lower monthly payments and long-term savings.
Example: How Credit Scores Affect Monthly Mortgage Payments
Credit Score |
Estimated Interest Rate |
Monthly Payment on a $300,000 Loan |
| 760 – 850 | 6.0% | $1,798 |
| 700 – 759 | 6.25% | $1,847 |
| 660 – 699 | 6.75% | $1,946 |
| 620 – 659 | 7.25% | $2,048 |
✅ Higher credit score = Lower interest rate
🚫 Lower credit score = Higher monthly payments
Over a 30-year loan, a poor credit score could cost you over $90,000 in extra interest!
How Lenders Calculate Your Credit Score
Lenders use three major credit bureaus to assess your credit score:
✔ Equifax®
✔ Experian™
✔ TransUnion®
They consider the middle score (not the average) when determining eligibility. If two people apply together, lenders use the lowest middle score between both borrowers.
How to Improve Your Credit Score Before Buying a House
If your score isn’t where you want it to be, follow these steps to improve it before applying:
1. Pay Your Bills on Time (35% of Your Score)
- Set up automatic payments or reminders
- Avoid late or missed payments
2. Reduce Your Credit Utilization (30% of Your Score)
- Keep credit card balances below 30% of your limit
- Example: If your limit is $10,000, keep your balance under $3,000
3. Don’t Apply for New Credit (10% of Your Score)
- Hard inquiries from new applications temporarily lower your score
- Wait until after your mortgage approval to apply for new credit
4. Keep Old Accounts Open (15% of Your Score)
- Closing old accounts shortens your credit history
- Keep them open, even if you don’t use them
5. Check Your Credit Report for Errors
- Get a free credit report at AnnualCreditReport.com
- Dispute errors that may be dragging your score down
Frequently Asked Questions (FAQs)
What is the lowest credit score needed to buy a house?
Most lenders require 580–620, but FHA loans allow scores as low as 500 with a larger down payment.
Can I buy a house with bad credit?
Yes! FHA and VA loans are more flexible with credit scores.
Does my spouse’s credit score affect my mortgage?
If applying jointly, lenders use the lowest middle score between both borrowers.
How long does it take to improve my credit score?
Most people see improvements within 3–6 months by making on-time payments and reducing debt.
Will checking my credit score lower it?
No! Checking your own credit is a soft inquiry and won’t affect your score.
Final Thoughts: Get Your Credit Mortgage-Ready
Your credit score determines your mortgage eligibility and interest rate. While 580–620 is the minimum for most loans, a score of 700+ will save you thousands in interest.
If your credit isn’t where it needs to be, start improving it today by paying bills on time, reducing debt, and monitoring your credit report.
📢 Ready to Buy a Home? Check Your Credit Score and Get Pre-Approved Now!
