What Credit Score Do You Need to Buy a House?

Your credit score is one of three numbers that most directly determine whether you get approved for a mortgage and what interest rate you pay. The other two are your debt-to-income ratio and your down payment. Get the credit piece right and everything else becomes easier. Get it wrong and you either cannot qualify or you pay thousands more in interest over the life of the loan.

Here is what you actually need to know.

Minimum Credit Score Requirements by Loan Type

There is no single answer because different loan programs have different minimums. Here is the breakdown:

Conventional loans (Fannie Mae / Freddie Mac). The minimum credit score is 620 for most conventional loan programs. However, getting approved at 620 is very different from getting a good rate at 620. Conventional pricing tiers mean that borrowers with a 620 score pay substantially more in rate and fees than borrowers with a 740 or higher.

FHA loans. The Federal Housing Administration guarantees loans with a minimum score of 580, allowing a 3.5 percent down payment. If your score falls between 500 and 579, FHA will still consider you — but you will need a 10 percent down payment, and many FHA-approved lenders impose their own higher minimums and will not lend below 580 in practice. FHA also charges mortgage insurance for the life of the loan (unless you put down 10 percent, in which case it drops off after 11 years), which adds up as a long-term cost.

VA loans. The Department of Veterans Affairs does not set a minimum credit score at the program level. Individual lenders typically require 580 to 620. VA loans have no down payment requirement and no private mortgage insurance, making them the best option for eligible veterans and service members.

USDA loans. The USDA Rural Development program does not have an official minimum, but most approved lenders require 640 or higher. USDA loans are for eligible rural and some suburban areas, with no down payment required.

Jumbo loans. These are loans above the conforming loan limit (which varies by county but is $806,500 in most areas for 2025). Lenders typically want a 700 to 740 minimum and often want to see closer to 760 for the best rates.

How Your Score Affects Your Interest Rate

This is where the real money is. The difference between a 680 credit score and a 760 credit score on a $350,000 mortgage can easily be 0.75 to 1.0 percentage point in interest rate. Over a 30-year loan, that difference compounds into tens of thousands of dollars in total interest paid.

Conventional loan pricing uses a grid called Loan Level Price Adjustments (LLPAs). The grid penalizes lower scores with higher fees expressed as points added to the rate. At a 620 score with a 5 percent down payment, you might be paying additional fees just due to the credit pricing adjustment — fees that typically get rolled into a higher rate rather than paid upfront.

The practical takeaway: if your score is between 620 and 720, spending 6 to 12 months improving it before applying is likely worth thousands of dollars in savings. If you are already above 740, you are in the top pricing tiers and further improvement provides diminishing returns.

What Makes Up Your Credit Score

FICO scores — the ones used by most mortgage lenders — are calculated from five factors:

• Payment history (35%). This is the single biggest factor. One 30-day late payment can drop a score significantly.
• Credit utilization (30%). This is how much of your available revolving credit you are using. Keeping utilization below 10 percent on each card produces the best scores.
• Length of credit history (15%). Longer averages are better. This is why closing old cards typically hurts your score.
• Credit mix (10%). Having both installment loans and revolving accounts is slightly better than having just one type.
• New credit (10%). Hard inquiries from new credit applications reduce scores slightly and temporarily. Multiple mortgage inquiries within a 14 to 45 day window are typically grouped as one inquiry.

How to Improve Your Score Before Applying

If your score needs work, the fastest legitimate improvements come from:

Pay down revolving balances. Credit utilization recalculates every billing cycle. If you can get card balances below 10 percent of the credit limit on each card before the statement closes, you may see a meaningful score increase within one to two billing cycles.

Dispute errors. Pull your credit reports from all three bureaus (Equifax, Experian, TransUnion) at annualcreditreport.com. Errors are common: accounts that do not belong to you, late payments reported incorrectly, balances that have been paid but not updated. Disputing and correcting errors is free and can produce quick improvements.

Do not close old accounts. Even if you are not using a card, keep it open. Closing it reduces available credit, which hurts utilization, and can shorten average account age.

Avoid opening new credit. New accounts reduce average account age and add hard inquiries. For the 6 to 12 months before applying for a mortgage, do not open new credit cards, do not finance a car, and do not co-sign anything.

Become an authorized user. If a parent or family member with excellent credit and low utilization adds you as an authorized user on an old, well-managed card, their positive history can appear on your credit file. This is a legitimate approach, not a loophole.

Can You Buy a House With No Credit?

It is harder but possible. If you have no credit history — not bad credit, but genuinely no record — you have a few paths:

Non-traditional credit. FHA allows lenders to underwrite with non-traditional credit references: 12 months of on-time rental payments (with landlord verification), utility payment history, and similar records. Not all lenders will do this, but some will.

Manual underwriting. Some lenders will manually underwrite a loan for borrowers with no traditional credit score, looking at bank statements, employment history, and other indicators of financial responsibility.

Build credit first. A secured credit card — where you deposit money as collateral — is the fastest legitimate path to building a credit profile from zero. Use it for small, regular purchases, pay it in full every month, and within 12 months you will typically have a scoreable credit file.

Credit Score Notes for UK, Canadian, Australian, and NZ Buyers

In the UK, lenders use their own proprietary scoring systems and check your report with Experian, Equifax, or TransUnion UK. There is no universal minimum, but a "good" to "excellent" rating will access the best mortgage products. The same fundamentals apply: pay on time, keep utilization low, avoid new credit before applying.

In Canada, FICO scores are used and the scale runs from 300 to 900. Most lenders require a minimum of 680 for the best rates. CMHC-insured mortgages (required when your down payment is under 20 percent) require a minimum 600.

In Australia, credit scores range from 0 to 1,200 (Experian) or 0 to 1,000 (Equifax). A score above 800 is generally considered excellent. Checking your credit file at mycreditfile.com.au before applying is standard practice.

In NZ, credit scores range from 0 to 1,000. A score above 700 is generally considered good for home loan applications.

Your Pre-Application Checklist

Before you apply for a mortgage, check:

1. Pull all three credit reports and look for errors.
2. Know your actual FICO score — not the free VantageScore estimates from Credit Karma, which use a different model. Your actual FICO 2, 4, and 5 scores (the ones mortgage lenders use) are available at myfico.com.
3. Pay down any card balances above 30 percent utilization before your lender runs your credit.
4. Dispute any errors and allow 30 to 60 days for them to resolve before applying.
5. Avoid any new credit applications for at least 6 months before applying.

The First-Time Homebuyer Toolkit includes a financial readiness worksheet covering your credit score, debt-to-income ratio, and cash-to-close calculation — so you walk into the lender conversation knowing your numbers rather than learning them for the first time.