What Credit Score is Needed to Buy a House?

Ever try to check your credit score and immediately feel like you just opened a door you weren’t ready for? You’re not alone. When it comes time to buy your first house, that little number seems to carry a lot of weight—and it actually does. If you’re wondering what credit score you really need to buy a house, you’re asking the most important question first-time buyers face.

Here’s the bottom line: Most mortgage lenders want to see at least a 620 on your credit report. That’s the cutoff for conventional loans—nothing fancy, not too strict, but not a cakewalk either. If you’re gunning for a lower down payment or special programs like FHA loans, you can technically squeak by with a score as low as 580. But here’s the twist—the higher your score, the less you’ll pay in interest over the life of your loan. Those extra points can literally save you tens of thousands of dollars.

• Why Credit Score Matters for Buying a House
• Minimum Credit Scores for Different Mortgages
• How Credit Score Changes Your Loan Terms
• What If Your Score Is Too Low?
• Smart Moves to Boost Your Score Fast

Why Credit Score Matters for Buying a House

Lenders don’t give out home loans just because you say you’re good for it. They want proof, and your credit score is pretty much your financial report card. It shows how you’ve handled borrowing money over the years—whether you pay bills on time, rack up debt, or open new credit cards like free samples.

Your credit score doesn’t just decide if you get a mortgage. It also determines your interest rate, the kind of loan you qualify for, and how much you’ll need for a down payment. A higher score usually means better terms and much less stress in the process. Think of it like showing up to a job interview with a glowing reference versus no reference at all.

Here’s what lenders are checking for:

• Do you reliably pay back what you borrow?
• How much total debt do you have? (Car loans, credit cards, student loans—everything counts.)
• Do you open new credit accounts all the time, or stick with a few?
• Have you managed different types of credit (like cards, car loans, or student loans)?

Check out how your score category can shake out for home loan approvals and interest rates:

Every 20 points on your score can move your mortgage rate up or down, which might not sound like much until you do the math on a $300,000 loan. Even a half-percent difference can mean saving or losing a few hundred bucks a month. That’s why your score matters so much when you start home shopping.

Minimum Credit Scores for Different Mortgages

Not all home loans are created equal. Different mortgage types have different rules when it comes to your credit score, and the gap between just getting approved and getting a great deal can be huge.

Check out how these loan types stack up for first-time buyers like you:

Here’s what all those numbers mean. A credit score around 620 usually puts you in the game for a basic home loan, but not at the best terms. Conventional loans give you more options, but lenders get picky fast below 680. FHA loans are built for first-timers and folks getting back on their feet, letting you qualify with scores as low as 580 (though there’s more paperwork and you’ll pay mortgage insurance).

VA loans are a sweet deal if you’ve served in the military—zero down and more forgiving credit rules, but most lenders still want to see at least a 620. USDA loans are targeted at buyers outside big cities, and that 640 mark is pretty firm if you want automated approval.

If your score’s below 580, you probably can’t buy with a small down payment. And while some lenders might ‘flex’ a few points for certain applicants, most stick pretty close to these cutoffs. So, if your score is just under one of these thresholds, it’s a smart move to work on bumping it up before you apply.

How Credit Score Changes Your Loan Terms

If you thought your credit score just decides whether you get the loan or not, there’s more to it. That number actually drives the whole negotiation—interest rates, monthly payments, fees, and what kind of credit score you need for the best deal. Even a difference of 20-30 points can mean paying way more or way less over time.

Banks and mortgage lenders use score ranges to set your terms. Usually, the higher you score, the less you pay—simple as that. You could have two people getting the same $350,000 loan, but if their scores are miles apart, their monthly payments and long-term costs look completely different.

Here’s how it plays out numbers-wise for a typical 30-year fixed mortgage. Notice how the rate and payment really drop as your credit score climbs:

That’s more than $100,000 difference in total interest between the top and bottom score ranges for the same loan amount. Lenders want to see a solid history of paying bills on time. If you’ve missed payments, maxed out cards, or just have a really short credit history, they’ll either bump up your rate or add private mortgage insurance (PMI) to cover their risk. That’s extra money out of your pocket every single month.

Have a bigger down payment? Sometimes that helps offset a lower score, but not always. In today’s market, with high housing prices and interest rates ticking around 6% to 7%, even a small bump in your score makes a noticeable dent in your monthly payment. That’s why folks usually try to boost their numbers before getting serious about house hunting.

What If Your Score Is Too Low?

If your credit score isn’t where lenders want it, don’t hit the panic button. You’ve still got options, and it’s not the end of your home-buying story. Lenders see you as a bigger risk when your score drops below 620, but that doesn’t mean you have to give up. Some government-backed loan programs, like FHA loans, can go as low as 580—even 500 if you’ve got a 10% down payment ready.

But let’s keep it real: the lower your score, the more you’ll fork over in interest and fees. A lower score might also stick you with a bigger down payment and could limit your choices for lenders. Here’s a breakdown to make sense of your options:

If you’re just below a key score, don’t rush. Waiting a few months to improve your score can save you thousands. Focus on quick wins:

• Pay down credit cards—balancing under 30% of your limit is gold.
• Always pay on time. One late bill can tank your score.
• Check your credit report for errors. Fixing mistakes can give an instant boost.
• Avoid opening new credit lines before applying for a mortgage.

Borrowers with credit scores closer to 700 get way better deals. A bump of just 20 or 30 points can mean a lower interest rate and smaller monthly payments. So if your number’s low, grab those quick wins before you pull the trigger on that loan application.

Smart Moves to Boost Your Score Fast

You don’t need to wait years for a better credit score. A few targeted changes can make a serious difference in a matter of months. Lenders typically update their info every 30 days, so your efforts show up pretty quickly. Here are some moves that actually work:

• Pay off credit card balances: It’s not about clearing everything to zero, but getting your credit utilization below 30% gives you a quick boost. If you’re using $1,500 out of a $5,000 limit, that’s 30%. Lower is even better.
• Don’t open new accounts unless you have to: Every hard inquiry knocks your score down a bit, and a bunch of new accounts can make you look risky to lenders.
• Fix errors on your report: One out of five people finds at least one mistake on their credit report, according to the Federal Trade Commission. Dispute anything that doesn’t look right. It’s your right as a consumer.
• Ask for higher limits: Counterintuitive, but if your bank raises your card’s limit and you don’t spend more, your utilization drops. Just don’t use the extra headroom to splurge.
• Pay on time, every time: Late payments can tank your number fast. Even one skipped bill can stick around for seven years. Set reminders or automatic payments so you never slip up.

If you want to see what kind of jump you could get, here’s some real data:

*Based on data from Experian and MyFICO.

“Your payment history accounts for 35% of your FICO Score, making it the single biggest factor in your credit profile,” says Experian, one of the three major credit bureaus.

Another trick: if you’re close to a major score threshold, like 620 or 700, a small jump can unlock way better mortgage rates. Check where you stand before applying so you don’t leave any savings on the table.