“What Credit Score Do You Really Need to Buy a Home?”

Your credit score plays a huge role in determining whether you can buy a home — and how much it will cost you over time. Yet, many first-time buyers hesitate to start the process because they’re unsure if their score is “good enough.”

Let’s break down what lenders look for, how credit scores impact your loan options, and what you can do if your score needs improvement.

1. Why Your Credit Score Matters

Your credit score reflects your history of borrowing and repayment. It helps lenders predict how likely you are to make future payments on time. The higher your score, the less risk you pose — which often means:

• Lower interest rates

• Higher loan approval odds

• More loan program options

Even a small increase in your score can save you thousands over the life of your mortgage.

2. The Minimum Scores for Different Loan Types

Each mortgage program has its own credit score requirements. Here’s a quick breakdown:

Loan Type	Minimum Credit Score	Best For
Conventional Loan	620+	Buyers with stable income and solid credit history
FHA Loan	580 (3.5% down) or 500 (10% down)	Buyers with lower scores or smaller down payments
VA Loan	Typically 620 (varies by lender)	Active-duty military, veterans, and eligible spouses
USDA Loan	Around 640	Buyers in eligible rural or suburban areas

Tip: Some lenders may set their own minimums, so it’s smart to shop around.

3. What Is a “Good” Credit Score?

Credit scores range from 300 to 850. Generally:

• Excellent: 740–850

• Good: 700–739

• Fair: 640–699

• Poor: 580 and below

A “good” score (700 or higher) often qualifies you for better interest rates and lower fees, but plenty of buyers close on homes with scores in the 600s — especially with FHA or VA loans.

4. How Your Score Affects Interest Rates

Even a 20-point difference can change your monthly payment. For example:If you borrow $300,000 for 30 years, a 1% lower interest rate could save you over $60,000 during the loan term. That’s why improving your score — even slightly — can have a big payoff.

5. How to Improve Your Credit Before Buying

If your score isn’t where you want it to be, small actions can make a big difference:

• Pay bills on time, every time.

• Keep credit card balances below 30% of your limit.

• Avoid opening or closing multiple accounts before applying.

• Check your credit report for errors and dispute any inaccuracies.

• Pay down debts gradually to reduce your overall utilization.

Give yourself at least three to six months to see improvement before applying for a mortgage.

6. The Bottom Line

You don’t need perfect credit to buy a home — just a solid plan and the right guidance. A trusted lender can review your situation and help match you with a mortgage program that fits your budget and goals.

Your realtor can also connect you with local lenders who specialize in helping first-time buyers succeed — even if your credit isn’t spotless yet.