To buy a house, the type of credit score you need depends largely on the mortgage loan type you are applying for, but generally:
- Conventional loans typically require a minimum credit score of 620. Higher scores (740+) get better interest rates and lower private mortgage insurance (PMI) costs. A down payment of at least 3% is usually required, with PMI if under 20% down
- FHA loans allow for lower credit scores, with a minimum of 500 if you can make a 10% down payment, or 580 for the minimum 3.5% down payment. FHA loans are government-backed and have more flexible credit requirements but include mortgage insurance premiums
- VA loans (for eligible veterans and military members) generally have no official minimum score, but lenders often require around 620. These loans usually require no down payment or mortgage insurance
- USDA loans require a credit score of about 640 for faster approval, though there is no set minimum by the agency. These loans help low- to moderate-income buyers in rural areas and require no down payment
- Jumbo loans (for loan amounts above conforming limits) usually require higher credit scores, often 700 or above
Lenders typically check credit scores from the three main credit bureaus (Equifax, Experian, TransUnion) and use the middle score to qualify you
. In summary, a credit score of at least 620 is generally needed to buy a house with a conventional loan, but government-backed loans like FHA can allow lower scores with larger down payments. Higher credit scores improve your chances of approval and better loan terms
