What Credit Score Do You Need to Buy a Home?
What Credit Score Do You Need to Buy a Home?
By Allen Deaver, Asset Realty
One of the most common questions I get from homebuyers—especially first-time buyers—is, “What credit score do I need to buy a home?” The answer depends on the type of loan you're using, but in general, the higher your score, the better your chances of securing a loan with favorable terms.
Minimum Credit Scores by Loan Type
Here’s a quick look at the general credit score requirements by loan type:
FHA Loan – Minimum score of 580 with 3.5% down payment. If your score is between 500-579, you may still qualify with a 10% down payment.
Conventional Loan – Typically requires a minimum score of 620. However, higher scores will qualify you for better interest rates and lower private mortgage insurance (PMI) premiums.
VA Loan – No official minimum, but most lenders look for a score of at least 620.
USDA Loan – Generally requires a minimum score of 640 for automated underwriting.
Why Credit Scores Matter
Lenders use your credit score to evaluate how risky it is to lend you money. A higher score can mean:
Lower interest rates
Lower monthly payments
Better loan terms
Greater negotiating power
What If Your Credit Score Is Low?
If your score isn’t quite where you want it to be, don’t worry. Many buyers work on improving their credit before purchasing a home. A few ways to boost your score include:
Paying down credit card balances
Making all payments on time
Avoiding new credit inquiries
Reviewing your credit report for errors
Next Steps
Before you start house hunting, it’s a good idea to check your credit score and talk with a trusted lender to see what programs you might qualify for. As your real estate guide, I’m here to help you connect with lenders who specialize in working with buyers of all credit levels.
If you’re curious about where you stand or want help building a homebuying plan that fits your goals, reach out to me today.
Helping Central Texas families turn real estate dreams into reality.
