What Does My Credit Score Need to Be to Buy a House?

There’s no set credit score that you need in order to buy a house, but there are some rules of thumb you should know before you try.

Feared by many and flaunted by some, credit scores are a necessary evil when it comes to buying a house. But your credit score isn’t just for getting a mortgage—it paints an overall financial picture. If you didn’t know, your FICO credit score is a number between 300 and 850 that represents the likelihood of you being able to pay back a loan. The higher your score, the higher your creditworthiness and vice versa.

What Affects Your Credit Score? Here’s What You Need to Know.

So what does your credit score need to be to buy a house? If only it were that simple. Like so many others, the answer to this question depends on a number of different factors. There’s no set credit score that will ensure your ability to secure a mortgage loan. But if you play your cards right, your credit history and score should be good enough to where you won’t have a problem getting a loan for your home.

There’s no set credit score that will ensure your ability to secure a mortgage loan.

Just to be on the safe side

As I said earlier, it’s never as simple as “my credit score needs to be (insert number here) for me to be able to buy a house.” But if you insist on a numerical value, anything above 660 is generally accepted as a “good” credit score and shouldn’t cause you any problems when you’re applying for a loan.

The good thing is, there’s a plethora of options for people who fall short of that 660 mark as well. Depending on how low your credit score is, the better option may be to hold off on buying a home until you can shore up your credit report to get a better rate on your mortgage. If you’re not sure, talk to a loan officer for a better picture of whether you should pursue a mortgage with a low credit score.

The Credit Scale

What’s the credit scale and how does that impact me getting a mortgage?

Since you asked, here’s an approximate breakdown of the different tiers of credit scores and how they’ll affect your mortgage prospects. It’s important to remember that every case is different. This scale is not law and you won’t truly know where you stand until you talk to a mortgage professional about your specific situation.

  • Excellent (760–850): Smooth sailing. Your credit score will have no impact on your interest rate. You will likely be offered the lowest rate available.
  • Very good (700–760): Your credit score may have a minimal impact on your interest rate. You could be offered interest rates 0.25% higher than the lowest available.
  • Good (660–699): Your credit score could have a small impact on your interest rate. This means rates up to 0.5% higher than the lowest available are possible.
  • Moderate (620–660): Your credit score will affect your interest rate. Be prepared for rates up to 1.5% higher than the lowest available.
  • Poor (580–620): Your credit score is going to seriously affect your interest rate. You may be hit with rates 2%–4% higher than the lowest available.
  • Very Poor (500–580): Now you’re in trouble. If you are offered a mortgage, you’ll be paying a very high rate.

Depending on how low your credit score is, the better option may be to hold off on buying a home until you can shore up your credit report to get a better rate on your mortgage.

You’ve got options

How do I know what products to look at based on my credit score?

Good question. Our products page offers a brief rundown of the basic features of every loan we offer and what credit scores you’ll need to qualify for them. You can still check out the products page for a deeper dive into the ins and outs of each loan, but here are some highlights of our different program options.

Conventional

  • The most popular loan in the country and the epitome of a basic loan.
  • Put down as little as 3% for fixed-rate loans.
  • Credit scores as low as 620 accepted.

FHA

  • For people who need a little credit flexibility.
  • Put down as little as 3.5%.
  • Credit scores as low as 550 accepted.

USDA

  • For people looking into rural properties.
  • 0% down payment.
  • Credit scores as low as 580 accepted.

VA

  • A loan for veterans or active service members.
  • 0% down payment.
  • Credit scores as low as 550 accepted.

Jumbo

  • A large amount loan for people looking into luxury homes.
  • Put down as little as 10%.
  • Credit scores as low as 660 accepted.

Let me reiterate that the terms of these mortgages are not set in stone. At Cardinal Financial, every loan is crafted specifically to fit each borrower’s unique financial picture. While these snapshots provide a general overview of our products, there may be some wiggle room once a loan officer knows the whole of your financial situation.

So now what?

Now that you’re a credit guru, you should have a better idea of what type of credit report it will take to qualify for a mortgage. You know the different types of mortgages and you know what’s generally considered to be “good credit,” but do you know your credit score? There are plenty of websites you can visit to get a free credit report. Be careful though, some sites offer Vantage credit scores but most top lenders only accept FICO credit scores. Be sure to know which one you’re looking at or you could get blindsided when it comes time to talk to a loan officer.

If you still have questions, don’t hesitate to call us! We’re more than happy to help you understand everything you need to know as you work toward homeownership!

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About the Author

Khari is one of our blog authors. He hails from the state of Georgia, and can tell you everything you need to know about rap music, the NBA, and Game of Thrones. As the youngest writer on staff, Khari enjoys learning about the ins and outs of homeownership and looks to provide a fresh, Millennial's perspective on happenings within the industry.