What credit score do you need to buy a house?

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Bag of money with 'credit' written on it next to a house
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If you’ve ever wondered what kind of credit score you need to buy a house, the answer is that it depends.

There are a variety of home loan programs available to buyers. In this article, we’ll take a look at several of them — including conventional loans, FHA loans, VA loans and USDA loans — and explain what kind of credit score each requires.

What’s a good credit score to buy a house?

When it comes to the right credit score to buy a house, higher is definitely better, according to Beverly Harzog, consumer finance analyst and credit card expert for U.S. News & World Report.

“Get your credit score as high as you possibly can before you apply for a mortgage. The lowest interest rates are given to people who have at least a 760 FICO score. You can save thousands of dollars over the life of your mortgage when you have excellent credit.”

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Conventional loan credit score requirements

  • Minimum credit score of 680 is generally required
  • Some lenders may allow a 640 or even a 620 score

A conventional loan is a mortgage product in a class all its own. It isn’t backed by the FHA, VA or USDA like the other loan products we’ll cover below. Rather, it adheres to guidelines set by either Fannie Mae or Freddie Mac — two of the nation’s largest mortgage clearinghouses.

“Conventional loans have tougher requirements, so these loans are generally appealing to those who are in a good place financially,” Harzog says. “Those who qualify tend to make bigger down payments and have a low risk of defaulting.”

With conventional loan credit score requirements, you generally want to have a score of 680 or above. If you’re in the 700s, so much the better.

When you drop down below 660, you may find some lenders won’t want to work with you. Other lenders may offer more flexibility — allowing you to go as low as 640 or even 620.

While lending qualifications vary by lender, anything below that is generally considered to be subprime mortgage territory.

FHA loan credit score requirements

  • Requires a 580 credit score
  • However, if you put 10% down, they’ll accept a score as low as 500

The Department of Housing and Urban Development (HUD) has long been known as a haven for homebuyers with lower credit scores and minimal down payments. That’s thanks to its Federal Housing Administration (FHA) mortgage loan program.

The program’s policy allows credit scores of 580 and above with 3.5% down payment to qualify for loans. However, those with lower credit scores aren’t barred from the program; they just have to bring more money to the closing table.

The FHA loan program will accept homebuyers with credit scores as low as 500 — provided they bring 10% of the home’s purchase price into the deal.

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“Remember that the lower your down payment, the higher your monthly payment will be because you’ll be borrowing more money,” Harzog says.

VA loan credit score requirements

  • No minimum credit score requirement
  • The VA is not a direct lender, which is why it has no requirements
  • Partner lenders generally look for 620 credit score

The U.S. Departments of Veterans Affairs makes its loan program available to all service members, veterans, and eligible surviving spouses who want to buy a home.

There is no credit score requirement to participate. However, because the VA is not a direct lender, the private lenders they partner with do have their own internal lending standards. Generally that means they look for a score of at least 620.

The good news is that there is some flexibility on credit score with a VA loan. Unfortunately, the bad news is that you’ll likely pay a higher interest rate if you have a credit score that’s lower than 620.

That’s why Harzog says you should “shoot for at least a 640 to put yourself in the range for a better rate” if you’re interested in a VA mortgage loan.

Meanwhile, in addition to flexibility on credit score, you don’t have to come up with a down payment to finance through the VA loan program — unless it’s required by the private lender.

USDA loan credit score requirements

  • Minimum credit score of 640 required
  • Better interest rates with a score in the high 600s

The United States Department of Agriculture makes mortgage loans available for the purchase of homes throughout rural America. A minimum credit score of 640 is required.

However, if you come in to the program with a score that low, the USDA says that you should have an otherwise clean credit file. That means no:

  • Collections
  • Charge-offs
  • Judgments
  • Disputed accounts

Harzog notes that while some scores lower than 640 might be accepted, it’s best to try to get your score up into the high 600s to get better interest rates on USDA loans.

Meanwhile, USDA loans are similar to VA loans in that there’s no down payment required.

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Final thought

The credit score you need to buy a house varies by lender and by which mortgage loan program you choose to use. As a general rule, the higher your score, the better off you’ll be.

“If you have at least a 760 FICO score, you should get the top rates. If that’s not realistic for you right now, shoot for at least a 700 FICO score. You won’t get the top rates, but you’ll still save a lot of money over the long run,” Harzog says.

For ways to improve your credit score, check out Harzog’s article5 sneaky way to ways to improve your credit score.’

When you’re ready to buy a home, see Team Clark’s step-by-step guide. It includes info on websites that will let you check your credit files and scores for free — so you’ll know when you’re on the path to a good credit score and buying the home of your dreams!

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