Buy a Home: Lower Credit Score Requirements
Buying the home of your dreams can lead to memorable family gatherings.
However, a subpar credit score may have prevented you from getting a mortgage loan approval.
Lower credit score requirements could improve your opportunity to become a homeowner.
What are the Credit Score Ranges?
Credit scores can range from 300 to 850.
What Factors Impact Your Credit Score?
Payment history is the most important credit score factor.
On-time payments positively influence credit scores, while slow payments or late payments will negatively impact your credit score.
Account balances also impact your credit score.
Low utilization rates are beneficial, however, high balance-to-limit ratios can negatively impact credit scores.
Length of account ownership is factored into credit scores.
Aged accounts with a timely payment history are rated favorably.
The type of account plays an important factor, too.
An optimal credit mix that includes revolving and installment accounts contribute toward credit scores.
Inquires for new accounts also impact credit scores.
Applying for too many new lines of credit is generally frowned upon, while sparingly applying for credit is viewed favorably.
Credit Score to Buy a Home
Credit score requirements vary according to the type of loan that fits your needs.
For a low-down payment home loan, such as a FHA mortgage, you would need a down payment that equals 3.5% of the purchase price and a 580 credit score.
However, if you buy the a home with a 10% down payment, the credit score requirement falls to 500 for an FHA mortgage loan.
VA mortgage loans are typically offered for borrowers with credit scores that range between 580 and 620. While the VA does not set specific credit score requirements, mortgage lenders will have program guidelines with a minimum credit score for a loan approval.
Fannie Mae mortgage loans with a down payment of 3% or 5% formerly required a minimum credit score of 620.
After November 16, 2025, Fannie Mae will no longer have minimum credit score requirements for conventional mortgage loans.
Speak With a Mortgage Broker About Buying a Home
If a low credit score has kept you from buying a home, now is a good time to speak with a licensed mortgage broker.
Samantha Cooley, a mortgage broker with Mindful Money offers consultative support for people who want to buy a home in Arizona, California and Colorado.
With more than 20 years of mortgage lending experience, Samantha can guide you through the steps toward securing a home loan.
Speak with Samantha today about financing for the home that you want to buy or about refinance an existing mortgage loan.