What Credit Score Do You Need to Buy a Home?

Your credit score is the most important number in your financial life when it comes to buying a house. It tells lenders how reliably you pay back borrowed money. Knowing where your score stands will help you understand which loan programs you qualify for.

Minimum Score Requirements

Different loan programs have different rules for approval. Conventional loans generally require a minimum credit score of 620. Government-backed FHA loans are more flexible, allowing buyers with scores as low as 580 to qualify for a 3.5% down payment. If your score is between 500 and 579, an FHA loan requires a much larger 10% down payment.

The Impact on Your Interest Rate

Meeting the minimum requirement gets your foot in the door, but a higher score saves you money. Lenders reserve their absolute best interest rates for borrowers with excellent credit. A higher score means less risk for the lender, which translates to a lower monthly payment for you.

How to Improve Your Score

If your score is a little too low, you can take fast action to improve it. Paying down high credit card balances is the quickest way to boost your numbers. You should also avoid opening any new credit accounts or closing old credit cards while you are preparing to buy a home.

Reach out to a Loan Officer today to discuss a strategy for your specific credit profile. As a Mortgage Broker, Quazel can help you review your credit report and find the right loan program for your situation.

Expect to close one week early.

Frequently Asked Questions

What is the minimum credit score to buy a house?

You typically need a minimum credit score of 580 to qualify for a standard FHA loan with a low down payment.

Can I get a conventional loan with a 600 credit score?

No. Conventional loans generally require a minimum credit score of 620 to qualify.

Will a higher credit score lower my mortgage rate?

Yes. Borrowers with higher credit scores are viewed as less risky and are rewarded with lower interest rates.

Should I close old credit cards before applying for a mortgage?

No. Closing old credit cards can actually hurt your credit score by reducing your total available credit history.