A 620 credit score is typically what you’ll need to get a mortgage for a home purchase. You can buy a house with a credit score as low as 500, but the rate will be higher and the down payment will be bigger. You’ll also have to pay a bigger mortgage every month, which will directly affect the price of the home you can buy.
Before you buy a house, you should know what the minimum credit score is and how it affects your rate and payment. This will help you decide if you should buy now or wait.
Hey there, future homeowner! If you’re sittin’ there wonderin’, “What’s the best FICO score to buy a house?” then you’ve come to the right spot I’m gonna lay it out straight for ya aim for a FICO score of 780 or higher Why? ‘Cause that’s the golden ticket to snaggin’ the lowest mortgage interest rates, savin’ you a boatload of cash, and makin’ that dream home way more affordable. But don’t sweat it if you ain’t there yet—we’ve got plenty to unpack about gettin’ a mortgage with lower scores and how to climb up to that magic number. Let’s dive in and break this down so you can get those house keys in your hand ASAP!
Why 780 Is the Holy Grail for Your FICO Score
First things first, let’s chat about why a FICO score of 780 or above is the best for buyin’ a house. Your FICO score is that three-digit number, rangin’ from 300 to 850, that tells lenders how good you are with managin’ debt. The higher it is, the more they trust ya, and the sweeter the deal they’ll offer. At 780, you’re basically in the VIP lounge of mortgage rates. Lenders roll out the red carpet with the lowest interest rates, which means smaller monthly payments and more house for your buck.
Picture this: I remember back when I was house huntin’, stressin’ over my score. I thought 700 was decent, but man, when I bumped it up closer to 780, the numbers on my loan offers looked like a whole different game. We’re talkin’ thousands saved over the life of a 30-year mortgage. So yeah, 780 ain’t just a number—it’s a game-changer.
Here’s why it rocks
- Lower Interest Rates: You get the best rates, sometimes droppin’ below what folks with 740 or 760 can snag.
- More Buyin’ Power: Lower payments mean you qualify for a pricier home without breakin’ the bank.
- Less Hassle: Lenders often ease up on paperwork and bend rules on stuff like debt-to-income ratios for high scorers.
But Wait, Can You Buy a House with a Lower FICO Score?
You can, for sure! If your score isn’t 780 yet, don’t give up just yet. The bare minimum for most conventional loans is 620. That’s the baseline where lenders start sayin’, “Alright, let’s talk. But here’s the catch: you can get approved at 620, but it won’t be nice. It will cost you more in interest, your monthly payments will be bigger, and there may be extra fees like expensive mortgage insurance.
For folks with scores even lower there’s still hope. You may be able to get a loan with a score as low as 500 in some ways. As there are different kinds of mortgages, there are different choices. This is because not all loans follow the same rules.
Mortgage Types and Their FICO Score Requirements
| Loan Type | Minimum FICO Score | Notes |
|---|---|---|
| Conventional | 620 | Most common loan; best rates at 780+. Higher rates below 700. |
| FHA (Federal Housing Administration) | 500 (with 10% down) or 580 (with 3.5% down) | Great for first-timers or lower scores; comes with insurance premiums. |
| VA (Veterans Affairs) | No official minimum, but often 580-620 | For military folks; no down payment needed, no mortgage insurance. |
| USDA (U.S. Department of Agriculture) | Usually 640, sometimes lower | For rural homebuyers; no down payment but has guarantee fees. |
| Jumbo | 700 or higher | For big loans in pricey areas; stricter rules ‘cause of higher risk. |
If your score is between 500 and 619, an FHA loan could be the best thing for you. Got military ties? Check out VA loans. Lookin’ at a rural spot? USDA could hook you up. For a Jumbo loan, you’ll need at least a 700 score if you want to buy a mansion in a fancy neighborhood.
How Your FICO Score Messes with Your Wallet
Now, let’s get real about how your FICO score hits your bank account when buyin’ a house. It’s all about the interest rate, fam. A higher score gets you a lower rate, which shrinks your monthly payment and lets you afford more house. A lower score? You’re stuck payin’ more interest, which can add up to tens of thousands over the years.
Check this out for a quick comparison. Say you’re borrowin’ $400,000 on a 30-year fixed-rate mortgage. Based on different FICO scores, here’s how the numbers break down:
| FICO Score Range | Average Interest Rate | Monthly Payment | Total Interest Paid (30 Years) |
|---|---|---|---|
| 780-850 | 5.96% | $2,386 | $459,000 |
| 700-759 | 6.19% | $2,447 | $481,000 |
| 620-639 | 7.55% | $2,808 | $611,000 |
See that? Droppin’ from 780 to 620 costs you over $150,000 extra in interest over the loan’s life. That’s like buyin’ a fancy car with the extra dough you’re shellin’ out! Plus, with a lower score, your debt-to-income ratio looks worse, meanin’ you might not even qualify for as big a loan. It’s a double whammy.
Why Aim Higher Than the Minimum?
You might be thinkin’, “If I can get a loan at 620, why bother pushin’ for more?” Well, lemme tell ya, settlin’ for the minimum is like buyin’ a cheap pair of kicks—they’ll get ya there, but they’re gonna hurt along the way. A higher FICO score don’t just save you money; it gives you options. You can negotiate better terms, skip some of the red tape, and even get exceptions if your debt load is a bit high. Plus, if you can’t swing a full 20% down payment, a better score cuts down on those pesky private mortgage insurance costs on conventional loans.
What Makes Up Your FICO Score Anyways?
Before we get into fixin’ your score, let’s peek under the hood of what builds that FICO number. It ain’t just one thing—it’s a mix of a few key pieces:
- Payment History: This is the biggie. Payin’ bills on time is huge. One late payment can tank your score faster than a bad TikTok trend.
- Amounts Owed: How much debt you got compared to your credit limits? Keep it under 30% of what’s available for best results.
- Length of Credit History: How long you’ve had credit matters. Older accounts look better.
- New Credit: Openin’ too many new cards or loans at once makes lenders nervous.
- Credit Mix: Hav’in a blend of stuff—like credit cards, car loans, or student debt—can help if you manage it well.
Knowin’ this helps ‘cause you can zero in on what’s draggin’ you down and fix it quick.
How to Boost Your FICO Score Before House Huntin’
Alright, so your score ain’t where you want it. No biggie—we can work with that. Boostin’ your FICO score takes a bit of time, but it’s worth every dang minute. Here’s some straight-up tips I’ve picked up over the years to get that number climbin’:
- Pay Bills on Time, Every Time: Set reminders or auto-pay. Even one missed payment can mess you up for months.
- Cut Down Credit Card Balances: Don’t max out your cards. Shoot for usin’ less than 30% of your limit, or even under 10% if you wanna look like a rockstar to lenders.
- Don’t Open New Credit: Avoid applyin’ for new cards or loans right before a mortgage application. It looks risky to lenders.
- Check for Errors: Pull your credit report and scan for mistakes. Wrong info can drag your score down, and you can dispute it for free.
- Pay Down Other Debt: Got student loans or car payments? Chip away at ‘em. Less debt means a better debt-to-income ratio, which lenders love.
- Avoid Cosignin’ Stuff: Don’t sign on for someone else’s loan. If they miss payments, it’s your score that takes the hit.
Gimme a few months of stickin’ to these, and you’ll likely see your score creep up. I’ve seen folks jump 50 points in half a year just by bein’ consistent. It ain’t overnight, but it’s doable.
Options if Your FICO Score Is in the Dumps
If your score is straight-up strugglin’—say, below 620—don’t lose hope. There’s still ways to get into a house, even if it means playin’ a slightly different game. Here’s what you can try:
- Bump Up Your Down Payment: Lenders might cut you some slack if you bring more cash to the table. Save up bonuses or ask family for a lil’ help (just make sure it’s documented right).
- Lower Your Debt Load: Pay off as much as you can before applyin’. A low debt-to-income ratio can sometimes outweigh a shaky score.
- Look at Non-QM Loans: These “non-qualified mortgages” don’t follow the usual strict rules. Some even work right after bankruptcy if you’ve got a big down payment and can handle a higher rate.
- Team Up with a Co-Borrower: If you’ve got a spouse or relative with a killer score, addin’ ‘em to the application can boost your chances.
These ain’t perfect fixes, but they’re lifelines if you’re itchin’ to buy now and can’t wait to build your score.
How Long Does It Take to Reach That Dream Score?
Raisin’ your FICO score depends on where you’re startin’ and how much work you put in. If you’re at 650 and wanna hit 780, it might take a year or more of solid habits—payin’ on time, droppin’ debt, and not messin’ with new credit. Smaller jumps, like from 600 to 620, could happen in a few months if you’re laser-focused. Just remember, patience is key. Rushin’ into a mortgage with a so-so score might cost ya more in the long run.
Which Loan Program Fits Your FICO Score?
Pickin’ the right mortgage type based on your FICO score is crucial. If you’re rockin’ a 780, go conventional and lock in those sweet rates. Hoverin’ around 580-620? FHA or VA (if you qualify) might be your jam. Below 580, FHA with a bigger down payment is prob’ly your only shot unless you’ve got military creds for a VA loan. And if you’re in a rural spot with a decent score, don’t sleep on USDA loans—they can save you on down payments.
Final Thoughts: Your FICO Score Is Your Key to Home Sweet Home
So, what’s the best FICO score to buy a house? I’m stickin’ with 780 or higher as the top dog. It gets you the lowest rates, the best terms, and the most house for your money. But let’s be real—most of us ain’t startin’ there, and that’s okay. Whether you’re at 620, 580, or even lower, there’s a path to homeownership. Start with knowin’ where you stand, pick a loan that fits your score, and work on boostin’ that number with every bill you pay on time.
We’re rootin’ for ya here. Buyin’ a house is a big freakin’ deal, and your FICO score is just one piece of the puzzle. Keep grindin’, stay smart with your money, and soon enough, you’ll be unlockin’ the door to your own place. Got questions or need a lil’ more guidance? Drop a comment, and I’ll do my best to help ya out. Let’s make that dream home happen!
What credit score is needed to buy a house based on the mortgage type?
Conventional loan. This popular loan program is a good fit if you have a credit score of at least 620 and can make a 20% down payment. If you’re making a lower down payment, pay close attention to your PMI premium: The lower your credit score, the higher your mortgage insurance premium and monthly payment will be.
FHA loan. A loan backed by the Federal Housing Administration (FHA) is often the only choice for borrowers with a credit score between 500 and 619. You’ll pay for FHA mortgage insurance that includes an upfront premium of 1. 75% of your loan amount and annual mortgage insurance premiums ranging between 0. 15% and 0. 75%. However, unlike PMI, the premium percentage is the same regardless of your credit score.
VA loan. This loan type can only be made to eligible veterans, active-duty service members, reservists and surviving spouses. Lenders don’t require mortgage insurance or a down payment. Although the VA has no minimum score requirement, most lenders set their minimum between 580 and 620.
USDA loan. The U. S. Department of Agriculture (USDA) backs this loan type to help low- and moderate-income buyers finance rural homes. No down payment is required, but you’ll pay upfront and annual guarantee fees that work like FHA mortgage insurance. The USDA doesn’t set a minimum credit score, but most lenders require at least 640.
Jumbo loan. This is your only choice if you’re borrowing above the conforming loan limits, and these loans are more common in expensive cities throughout the country. Most jumbo loan programs require a credit score of at least 700, although there may be programs with lower score limits if you can afford a higher interest rate and payment.
Most lenders use the FICO credit score system
There are several types of credit scoring formulas, but most lenders use the FICO scoring system. An algorithm uses your payment history, how you handle credit, and the number of different accounts you have to figure out your FICO Score. How much is your home purchase price? $400,000.
Best Home Loan for First Time Home Buyer With 700 Credit Score or Better
FAQ
What is the best credit score to buy a house?
The higher your score, the less risk you present. When considering the best credit score to buy a house, many lenders use the FICO model. It grades consumers on a 300 to 850 point range, with a higher score indicating less risk to the lender.
Do you need a credit score to buy a house?
Your credit score is one of the most important factors lenders look at when you apply for a mortgage loan. Different types of loans have different minimum credit score requirements. Typically, the higher your credit score is, the lower an interest rate you will qualify for. Strictly speaking, you don’t need a credit score to buy a house.
What is a good FICO score?
FICO scores are made up of a single number that is based on information gathered by the three main credit bureaus (Experian, Equifax, and TransUnion) using a special formula. FICO credit scores can range from 300-850. According to Experian, most consumers have credit scores that fall between 600 and 750. What’s included in a mortgage FICO score?.
Can you buy a house with a low credit score?
You might apply for the loan with only the applicant whose credit score is good, though, if one of them has a low score. If you omit one applicant’s credit score, you must also omit their income from the application. What is a good credit score to buy a house? A good credit score to buy a house is 720 or higher.
What credit score is needed for a home loan?
A credit score between 500 and 620 is needed for a home loan, but a higher credit score will lead to a lower mortgage interest rate and monthly payment.
What is a FICO score for a mortgage?
Lenders use your FICO score, a credit scoring model made just for mortgages, when they look over your mortgage application. A FICO score is a single number that’s calculated using a proprietary formula and data compiled by the three major credit reporting bureaus (Experian, Equifax and TransUnion).
What is a good FICO score to buy a house?
700-749: Strong borrower with access to good interest rates and more home loan options. 750-850: Excellent credit!Mar 3, 2025
What credit score is needed for a $250000 house?
What credit score do I need to buy a $250,000 house? You can buy a $250,000 house with a wide range of credit scores, from as low as 500 to as high as 800+.Mar 19, 2025
What FICO score gets the best mortgage rates?
You generally need a credit score of at least 580 to qualify for a mortgage, and a score of 760 or higher to get the best interest rate.
Can a 700 credit score get you a house?
Yes, a 700 credit score is considered good by mortgage lenders and qualifies you for various home loan options. It indicates responsible credit history and puts you in a favorable position for conventional, FHA, VA, and USDA loans.