Mortgage 101

What is Considered a Good Credit Score for a Mortgage?

By Lauren Caggiano on July, 4 2022
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Lauren Caggiano

Lauren Caggiano is a Fort Wayne-based copywriter and editor with a nerdy passion for AP Style. In her free time, she enjoys volunteering, thrift shopping, fitness and travel. Learn more on her website:

A three-digit number can make a big difference in your financial future. Yes, your credit score can determine whether buying a house is within reach. That’s because lenders look at it as a window into your financial health and habits. 

Having a good enough credit score to buy a house makes the entire process more streamlined and more affordable. The higher your credit score, the lower the mortgage interest rate you’ll qualify for.


That said, let’s review the nuts and bolts of determining eligibility, such as the minimum or ideal credit score you’ll need to buy a house and which loan types are best for certain credit ranges.


What is the Minimum Credit Score to Buy a House?

Your credit score ranges from 300 to 850, and that number is used to determine if you’re worthy of credit. The higher your score, the more attractive you are to lenders. However, even if yours is on the lower side. it’s still possible. It all depends on the type of loan you’re applying for. Conventional and government-backed loans have different credit score requirements. (Ruoff typically cannot offer mortgages to anyone with a credit score under 580).


Conventional Loan Requirements

Conventional loans aren’t guaranteed or backed by a government program. Buyers who have higher credit scores and money saved up for a down payment are good candidates for this product. It’s recommended you have a credit score of 620 or higher to be considered for this type. If yours is lower than 620, lenders either won’t be able to approve your loan or you may have to pay more in interest and therefore your monthly payment is going to be higher.


FHA Loan Requirements

If you have a lower credit score or don’t have savings for a down payment you might consider a government-insured FHA loan. The minimum credit score for an FHA loan is usually 580. A higher credit score might mean you can negotiate a better rate.


VA Loan Requirements

Also government-based, a VA loan might be an option for you if you’re a veteran or qualified service member or spouse. There’s no industry-set minimum credit score required for this one, though it helps to have a score of 580 or higher.


USDA Loan Requirements

Do you prefer the quiet and serene nature of the country? A USDA loan might be the right loan product for you. You must live in a qualified rural or suburban area and have an income that falls below 115% of the area’s median income. Most lenders require a minimum credit score of 640 for USDA loans.


Understanding Your Credit Score

The following factors are taken into consideration to build your score:

  • Whether you make payments on time
  • How you use your credit
  • Length of your credit history
  • Your new credit accounts
  • Types of credit you use


Beyond understanding the mechanics of your credit score, potential borrowers would stand to benefit from doing the following:


  1. Get a copy of your credit report (you’re entitled to a free copy from each bureau every year- you can get this through If there is incorrect information reported, investigate it and get these items cleared up. Dispute the information with the 3 credit bureaus if necessary. If you notice accounts you were unaware of, look into these. You might have fraud.

  1. If there are things that need to be addressed that are bringing down your score, start working on getting those taken care of first:
        • Collections, liens, past due accounts, accounts with balances over the limit
        • High balances on revolving debt- start by figuring out which accounts have the highest interest rates and potentially start there. Or you may work on paying off the lowest balance accounts first, so you can eliminate those payments altogether and then apply what you had set aside for those minimum payments toward the next highest balance card.
  1. If you do not have a credit score reported, consider establishing a credit account so you can begin building your credit. If you do not qualify right away, consider a secured credit card to start building credit history; this is basically a cash-secured card where you deposit money into a savings account and the bank sets your credit limit on your card to match that savings account balance; once you establish good payment history, you may qualify for better credit card options and can switch your card to something that will work better for you). You may also talk to your lender about using non-traditional forms of credit to qualify for a mortgage.

  1. If your score is in order and where you want it to be, try to remain “hands-off” as you go through the mortgage approval process. Opening new accounts and closing old accounts can negatively impact your score, so it’s best to wait until after you close on your mortgage to do things like this.


The Bottom Line

The credit score required to buy a home differs based on the type of loan you’re applying for. But in general, the higher your score is, the easier it will be to get a great mortgage loan and a better interest rate. The key is to track your score, check your credit report regularly and work on any issues that might be holding you back from approval.


If you want to qualify for a loan and your credit score isn’t up to par, you can take actionable steps to increase your attractiveness to lenders. It’s prudent to read up on the true cost of home ownership so you can make an educated decision. The best time to buy a house is when you’re ready. Put in the time to take an honest look at your financial picture, including credit score, available cash on hand, and desired timeframe.


Once you’ve done your due diligence, contact a loan officer in your area for a loan application and expect to provide some preliminary paperwork. Based on your situation, the lender may offer you a preapproval up to a specified loan amount. However, know that the details of your loan offer are likely to change based on a few factors. In the meantime, your lender will work with you to ensure all details are taken care of, so that come closing day it’s smooth sailing.