What a 650 Credit Score Means for Home Buying and Loans

If your credit score sits around 650, you’re probably wondering if you can still get a mortgage or a personal loan. The short answer: yes, you can, but you’ll face higher interest rates and stricter conditions. Lenders use your score to gauge risk, so a 650 tells them you’re a moderate risk – not terrible, but not great either. Knowing what to expect helps you plan better and avoid surprise rejections.

How Lenders See a 650 Score

Most big banks and building societies consider 650 as the lower bound for a conventional mortgage. You’ll likely qualify for a loan, but the rate could be 0.5%–1.5% above the best rates offered to borrowers with scores above 720. That extra cost adds up over a 25‑year term. Some lenders also require a larger down payment – often 10% instead of the usual 5% – to offset the perceived risk.

Practical Steps to Make a 650 Score Work

First, shop around. Smaller credit unions and specialist mortgage brokers sometimes have programs tailored for 650‑plus scores and can offer better terms than the high‑street giants. Second, boost your deposit. A bigger down payment reduces the loan‑to‑value ratio, which can convince lenders to lower the rate. Third, clean up any errors on your credit report. A single mistaken missed payment can knock a few points off, and fixing it is free.

Also, consider a government‑backed loan like an FHA or a Help to Buy scheme. These products often have more relaxed credit requirements because the government shares part of the risk. Just remember they may come with additional fees or insurance costs.

Finally, work on improving your score for future refinancing. Pay down high‑interest credit cards, keep utilization below 30%, and avoid opening new credit lines right before you apply for a mortgage. Every point you add can shave hundreds of pounds off your monthly payment.

Bottom line: a 650 credit score isn’t a death sentence for home ownership. It means you’ll pay a bit more and may need a larger deposit, but with the right lender and a few smart moves, you can still get the keys. Keep an eye on your credit, compare offers, and don’t be afraid to negotiate – the right approach can turn a modest score into a solid purchase.