What credit score is needed to buy a house?

If you plan to use a loan to purchase house, you will need to reach out to mortgage lender to start the pre-approval process for a loan. Credit is large component of the mortgage loan qualification process. Your credit score represents your ability to manage debt. They will also use your credit score to determine the interest rate they can provide you with.

So the big question is: What Credit Qualifications do lenders require?

The minimum score you need to qualify for most loan programs is between a 580-640.

Most loans fall into four catagories. Government loans have certain guidelines that lenders must adhere to, but ultimately the lender determines the minimum credit score they accept, therefore it could vary between mortgage companies.

Conventional loans are generally for borrowers with stronger credit, solid income, and savings for a down payment. The lender alone sets the credit requirements. Most lenders will require at least a 620.

FHA or Federal Housing Administration loans are loans that are federally insured for borrows with lower credit scores and income. If your credit needs some work, this could be the right loan for you. The Federal Housing Administration credit score requirement is 580, but the lender that you work with may have higher requirements. 

U.S. Department of Agriculture (USDA) loans are government backed mortgages for lower income home buyers in areas meeting certain population requirements. USDA does not have a fixed credit score requirement, but a 580 credit score is the absolute minimum. The lender may also have a higher requirement.

U.S. Department of Veteran Affairs (VA) are government backed loans. Only military veterans, service members, and surviving spouses are eligible for a VA loan. The VA loan does not have a  minimum credit score requirement, but you will need to at least have a 580. The lender may have a higher minimum on top of this.

Can you buy a house with bad credit?

The answer is, you must have at least a 580 to consider qualifying for a loan.

There are many ways to work on improving your credit. 

It may be a good idea to reach out to a lender, and have them pull a soft credit check, as they can look at ways to pay down accounts and resolve delinquencies. They can help make recommendations on how to improve your credit!