Key takeaways – Your credit score is one of the most important factors lenders look at when you apply for a mortgage loan — the higher your credit score is, the lower an interest rate you’ll qualify for. – For a conventional mortgage loan, you’ll need a minimum credit score of…
0; an FHA loan requires a minimum credit score of 500 with a 10% down payment, and 580 with a 3.5% down payment. – Government-backed USDA loans and VA loans have no minimum credit score requirement, although lenders often like to see at least 640 and 620 for these, respectively. Your credit score is one of the most important factors lenders consider when you apply for a mortgage — and higher scores usually result in lower interest rates and better terms
Ultimately, when buying a house, what’s considered a good score depends on the type of mortgage you’re seeking. Many lenders will require you to have a score of at least 620 — what’s classified as a “fair” rating — to qualify for a mortgage loan. With a Federal Housing Administration (FHA) loan, though, you might be able to get approved with a score as low as 500.
Getting a mortgage with a score that low will mean paying more, both in terms of the APR and private mortgage insurance. What credit score do you need to buy a house? The minimum credit score to be eligible for a mortgage loan depends on both the lender and the type of loan.