What's the Minimum Credit Score to Buy A House?

By PropertyClub Team
Jan 9th 2023
The minimum credit score to buy a house is 620. This is the typical credit score requirement for a conventional loan. However, there are other types of loans out there, and it is possible to buy a house with a lower credit score if you can put down a larger down payment.

Buying a home is the most significant investment you are likely to make in your lifetime. It is important to have enough money for a down payment and qualifying credit. The minimum FICO score needed to buy a house can vary depending on the type of loan you’re applying for and how much money you plan to put down. 

hash-markMinimum Credit Score To Buy A House By Loan 

1. FHA Loan

As its name suggests, FHA loans are from the Federal Housing Administration. More people can get FHA loans thanks to their lower minimum requirements. What’s more, borrowers can look forward to not having to worry about higher interest rates just because they have a lower credit rating.

Moreover, technically FHA loans don’t have a minimum, as established credit isn’t a necessity. That said, most lenders like borrowers to have a credit score of at least 580.

The following are the typical requirements to get approved for an FHA loan:

  • Minimum loan length of 15 years
  • Minimum credit score of 580
  • Down payment of 3.5%

2. VA Loan

The Department of Veteran Affairs backs these loans, giving veterans and active-duty military personnel more housing opportunities. Mortgage lenders offer VA loans with low interest rates. This is because the loans are protected against losses. 

Moreover, the mortgage rates are usually the lowest around, and no down payment is required, making VA loans quite appealing.

The following are the requirements to get approved for a VA loan:

  • Borrowers must show a COE (Certificate of Eligibility)
  • Minimum credit score of 580

3. Conventional Loan

This is the most common loan type used for home loans. At a minimum, the borrower needs a credit score of 620. Mortgage lenders and brokers, as well as credit unions, issue conventional loans. Thanks to the low rates and straightforward approval process, conventional loans are typically the default loan option for potential homebuyers. 

The following are the requirements to get approved for a conventional loan:

  • Completed mortgage application
  • Completed lender documents
  • Minimum credit score of 620
  • Established credit history

4. USDA Loan

This mortgage option is backed by the government and available to housing that’s outside areas that are densely populated. Out of all the rural areas in the United States, approximately 91% are covered by the USDA. This includes small towns and suburbs.

No down payment is necessary under the USDA loan program, and the interest rates are quite low. However, borrowers need to have a minimum credit score of 620 in most cases, although some exceptions are made from time to time based on the borrower’s circumstances.

The following are the requirements to get approved for a USDA loan:

  • Available only for housing outside of urban areas
  • Minimum credit score of 620
  • Down payment not required

5. Jumbo Loan

Buyers who have mortgage loans that are too big for local loan limits will want to check out jumbo loans. Technically, jumbo loans don’t require any specific credit ratings, only that they should be relatively high. Higher scores are more likely to get approved, along with lower interest rates for the borrower.

What’s more, borrowers can use jumbo loans on various types of property, not just traditional housing. The required down payment can vary quite a bit, as well. Finally, it’s worth noting that the government does not back jumbo loans.

The following are the requirements to get approved for a jumbo loan:

  • Down payment of 5% to 25% (income/credit-based)
  • Minimum credit score of 680

hash-markHow Can I Improve My Credit Standing?

If your credit is hurting your ability to buy a house, there are ways you can improve it. One way to increase your credit score is by paying off delinquent accounts and avoiding opening new ones.

This will help you pay off debts like medical bills or utility bills that can be reported to the credit bureaus. You should also ensure that all of the information on your credit report is accurate and up-to-date. 

Equifax, Experian, and Transunion will give you a copy of your credit report at no charge once per year through various online resources.

Lastly, you could explore different options for improving your income or managing your debt with a financial counselor or money expert who specializes in mortgages.


hash-markCredit Score for Buying a House Bottom Line

A good credit score is important for any financial transaction, but it’s especially important when buying a home. What’s more, a good credit score will help you get approved for a loan with a low interest rate, and this can save you thousands of dollars in the long run.

However, there are exceptions to the minimum credit score requirement, such as buying a home with a spouse who has a good credit score. If you’re unsure of your current credit rating, check your credit report for free online to see where you stand.

Don’t forget to keep an eye out for errors and inaccuracies and report right away. In doing so, you can get them fixed, which will help your overall credit rating.