Getting financially ready · Phase 1
What Credit Score Do You Need to Buy a House?
There is no single magic number — the minimum depends on the loan, and the difference between a "good enough" score and a strong one is worth tens of thousands of dollars over your mortgage. Here is the real threshold for each loan type in 2026, what your score actually changes, and how to move it before you apply.
The short answer. You can buy a home with a score as low as 500 using an FHA loan and 10% down, but the practical target for most buyers is 580 (FHA, 3.5% down) or 620 (conventional, including 3%-down first-time-buyer programs). VA and USDA loans set no federal minimum, though lenders usually want roughly 620–640. A higher score doesn't just get you approved — it lowers your rate and your mortgage insurance, so it's one of the most valuable things to improve before you apply.
Minimum credit score by loan type (2026)
These are the program minimums set by the agencies that back each loan. Individual lenders can require a higher score than the program floor — an "overlay" — so if one lender turns you down at the minimum, another may still say yes.
| Loan type | Minimum score | Minimum down payment |
|---|---|---|
| FHA | 580 | 3.5% |
| FHA (lower-score path) | 500–579 | 10% |
| Conventional (incl. Conventional 97 / HomeReady / Home Possible) | 620 (typical) | 3% |
| VA | No federal minimum (lenders ~620) | 0% |
| USDA | No federal minimum (lenders ~640) | 0% |
Sources: HUD / FHA (FHA thresholds), Fannie Mae (conventional), VA and USDA program rules. Lender overlays vary.
Your score does more than get you approved — it sets your rate
Approval is the low bar. The bigger effect is on price. Lenders sort borrowers into credit tiers and charge higher rates as scores fall, because a lower score signals more risk. The CFPB's own rate-explorer tool shows the same loan quoted at meaningfully different rates across score bands on the same day.
How much does that matter? Consider a $300,000, 30-year fixed loan. At an illustrative 6.5% the principal-and-interest payment is about $1,896; at 7.0% it's about $1,996 — roughly $100 more a month, or about $36,000 over the life of the loan, for the same house. (Those rates are illustrative, near the Freddie Mac weekly average of about 6.58% in July 2026; the point is the gap a half-point creates, not the exact quote.)
The compounding effect on conventional loans
If you put less than 20% down on a conventional loan, a higher credit score also lowers your private mortgage insurance (PMI) premium. So on a low-down-payment conventional loan, improving your score can cut both your interest rate and your monthly PMI at the same time — two savings from one move.
The credit tiers lenders actually price against
Pricing generally improves in bands rather than point by point, so the goal before applying is to cross into the next tier up. Common FICO ranges lenders reference:
- 760–850 — Exceptional / Very good: the best pricing lenders offer.
- 700–759 — Good: strong rates, near the top tier.
- 680–699 — Good (lower): still solid, slightly higher pricing.
- 660–679 / 640–659: approvable on most programs; noticeably higher rates.
- 620–639: the conventional floor; FHA is often better value here.
- 580–619: FHA territory (3.5% down); conventional is harder.
- 500–579: FHA only, with 10% down.
Because the improvement is tiered, someone at 618 has an outsized reason to reach 620 (conventional eligibility), and someone at 738 has real reason to reach 760 (top-tier pricing). A few points near a boundary can be worth far more than the effort to get them.
How to raise your score before you apply
Two factors dominate a FICO score: payment history and credit utilization (how much of your available credit you're using). Most pre-application gains come from those two:
- Pay every bill on time. A single recent late payment can cost more points than months of good behavior earn back. Set autopay for at least the minimums.
- Lower your utilization before the statement closes. Scores read the balance reported on your statement date, not just what you eventually pay. Paying cards down so you report a small percentage of your limit can lift your score quickly.
- Don't close old accounts. Closing a card shortens your average account age and shrinks your available credit — both can push your score down right when you need it up.
- Avoid new credit right before applying. A new card or car loan adds an inquiry and a new balance, and it changes your debt-to-income ratio underwriters check.
- Dispute errors on your reports. Pull all three bureau reports, and correct anything wrong — a mistaken late payment or an account that isn't yours can be dragging your score down.
Rate-shopping won't wreck your credit. Scoring models treat multiple mortgage inquiries inside a short window — commonly 14 to 45 days depending on the model — as one inquiry, so you can compare two or three lenders on the same days without extra damage. The savings from comparing offers dwarf the tiny, temporary dip.
See what your score can carry
Model your payment and debt-to-income
Credit is one lever; your debt-to-income ratio and payment are the others. See how they fit together — no signup.
Next in Phase 1 of the First-Time Home Buyer Guide: your credit affects which loan is the better deal — compare FHA vs conventional for first-time buyers and check down payment assistance you may qualify for.
Keep reading
- First-Time Buyer Questions, AnsweredThe 30 questions buyers actually ask — down payments, pre-approval, closing costs, PMI, and the first year of ownership.
- The First-Time Home Buyer GuideThe whole journey, phase by phase, with a calculator at each step.
- Down Payment AssistanceGrants, forgivable seconds, and mortgage credit certificates — who qualifies.
Frequently asked questions
What credit score do you need to buy a house?+
It depends on the loan. FHA loans allow a 580 score with 3.5% down, or 500–579 with 10% down. Most conventional loans (including 3%-down programs like Conventional 97, HomeReady, and Home Possible) look for at least 620. VA and USDA loans have no government-set minimum, but lenders commonly want roughly 620–640. So the practical floor to buy a home is around 500 with an FHA loan and a larger down payment, and 580–620 for most buyers.
Can I buy a house with a 600 credit score?+
Yes. A 600 score clears the FHA threshold of 580, so you can put as little as 3.5% down on an FHA loan. It's below the 620 that most conventional loans want, so conventional financing may be harder until you raise it. At 600 you'll also pay a higher interest rate than a borrower with a 740+ score, which is why nudging your score up before applying can be worth real money.
Can I buy a house with bad credit, under 580?+
Possibly. FHA rules allow scores of 500–579 if you put down at least 10% instead of 3.5%. Below 500 you won't qualify for an FHA-insured loan. Individual lenders can also set their own higher minimums (called overlays), so a 520 borrower may need to shop for a lender that follows FHA's floor. If your score is under 580, the usual advice is to weigh whether a few months of credit repair would get you to 580+ and a much smaller down payment.
Does a higher credit score really lower my mortgage payment?+
Yes — through your interest rate and your mortgage insurance. Lenders price loans in credit tiers, and higher-score borrowers get lower rates. On a $300,000 30-year loan, even a half-point difference in rate is roughly $100 a month — about $36,000 over the life of the loan. On conventional loans a higher score also lowers your PMI premium. That is why credit is one of the highest-leverage things to improve before you apply.
What credit score do I need for an FHA loan versus a conventional loan?+
FHA is the more forgiving of the two: 580 for 3.5% down (500–579 with 10% down). Conventional loans typically require 620, including the 3%-down first-time-buyer programs. Because of that gap, FHA is often the path for buyers in the 580–619 range, while buyers at 620 and above can compare FHA against conventional — where, unlike FHA, mortgage insurance can be cancelled once you reach 20% equity.
Will getting pre-approved or shopping lenders hurt my credit score?+
Barely, and it's worth it. A mortgage pre-approval is a hard inquiry that may shave a few points temporarily. Credit-scoring models treat multiple mortgage inquiries within a short window — commonly 14 to 45 days depending on the model — as a single event, specifically so you can rate-shop several lenders without extra damage. Comparing two or three lenders almost always saves far more than the tiny, temporary score dip costs.
How can I raise my credit score before applying for a mortgage?+
Focus on the two biggest factors: payment history and credit utilization. Pay every bill on time, and pay balances down so you're using a small share of your available credit before the statement closes. Don't close old accounts (it shortens your history and can raise utilization), avoid opening new credit right before applying, and check your reports for errors you can dispute. Even a few months of this can move your score enough to reach the next pricing tier.
Methodology
Credit-score minimums are the program thresholds published by HUD/FHA and the conventional agencies (Fannie Mae/Freddie Mac); VA and USDA set no federal score minimum, so the figures shown reflect common lender practice. Lender overlays can be stricter than program minimums. The payment comparison is a direct amortization calculation on a $300,000, 30-year fixed loan at illustrative rates of 6.5% and 7.0% — chosen near the Freddie Mac July 2026 weekly average (~6.58%) to show the effect of a rate gap, not to quote a live rate. This guide is educational and not lending advice; your rate is set by your full profile and the lender.
Sources
- HUD — FHA Single Family Housing Policy Handbook (4000.1), credit & down payment — accessed 2026-07-27
- FHA.com — FHA credit score & down payment requirements — accessed 2026-07-27
- Fannie Mae — Eligibility Matrix (conventional credit score / LTV) — accessed 2026-07-27
- Consumer Financial Protection Bureau — Explore mortgage rates by credit score — accessed 2026-07-27
- CFPB — Rate shopping counts as one inquiry within a window — accessed 2026-07-27
- Freddie Mac — Primary Mortgage Market Survey (weekly average rates) — accessed 2026-07-27