What Credit Score Do You Need to Buy a House

The thresholds that actually matter

There are 2 numbers to know: the minimum score to get approved, and the score that gets you the best available rate. Approval and affordability are not the same thing.

*Most lenders' actual approval threshold. †See the lender overlay section below.

The FHA lender overlay trap

FHA loans are insured by the federal government with an official minimum score of 580 for 3.5% down. That number is widely cited. What most buyers don't learn until they apply: most FHA-approved lenders add their own overlays, internal policies that set a higher minimum than the FHA requires.

In practice, 620–640 is the floor at most major banks and mortgage companies for FHA approval, regardless of what HUD guidelines say. A buyer at 590 who has been told they qualify for FHA based on the published 580 minimum will get turned down at application.

The path at 580–619 is not impossible, it's narrower. Some credit unions, community banks, and portfolio lenders underwrite to FHA guidelines without adding overlays. You have to specifically ask whether a lender has a minimum above 580 before submitting an application. A hard inquiry that leads to a denial is a waste of a credit pull.

What 20 points is worth in dollars

On a conventional mortgage, your credit score directly determines the loan-level price adjustments (LLPAs) that Fannie Mae and Freddie Mac charge lenders. Lenders pass those adjustments to borrowers through the interest rate. The result is a rate that shifts with every 20-point band in your score.

On a $300,000 30-year fixed mortgage, the difference between a 680 score and a 740 score is typically 0.5–0.75% in rate. That translates to roughly $90–$135 less per month, $1,080–$1,620 per year, and $32,000–$49,000 over the life of the loan.

The breakpoints where pricing changes meaningfully on conventional loans:

These are approximate ranges based on typical LLPA structures, exact amounts vary by lender, loan-to-value ratio, and current market conditions. The point is not the specific number. The point is that every 20-point band has a measurable monthly cost, and whether you have time to move up a band before locking your rate is a calculation worth making.

What you can actually move before closing

Generic credit improvement advice rarely distinguishes between what's movable in 30–45 days and what requires 6–12 months. Before a mortgage deadline, only the fast levers matter.

Fast, can move in 30 to 45 days

• Credit utilization. Paying down credit card balances takes effect in one statement cycle, typically 30–45 days. This is the highest-impact, fastest-moving factor in a crisis window. The threshold that matters: below 30% per card and in aggregate. At 80% utilization on a single card, one targeted paydown can move your score 20–40 points before the next statement closes.
• Collection account deletion. A pay-for-delete agreement on a collection account, once the account is removed, can produce a meaningful score increase. Resolution to deletion typically takes 30–45 days. See how to remove a collection from your credit report for the negotiation process.
• FCRA dispute resolution. Inaccurate information disputed by certified mail must be investigated within 30 days. If the item is deleted, the score impact is immediate at the next update. See the dispute process for charge-offs and late payments.
• Rapid Rescore. This is the tool most buyers don't know to ask for. Once a collection is deleted, a dispute is resolved, or a balance is paid down, your score won't reflect the change until the creditor reports the update in the normal monthly cycle, which could be weeks away. Rapid Rescore is a lender-initiated process that forces an immediate score recalculation using updated information, typically in 3–5 business days. You cannot initiate it yourself, only a mortgage lender can. If you are mid-application and a credit event has occurred, ask your lender explicitly whether they can run a Rapid Rescore.

Slow, 6 to 12 months minimum

• Payment history. The largest factor in FICO scoring (35%) builds through consistent on-time payments over time. A single late payment from last year cannot be repaired in 30 days, it can only be disputed if inaccurate, or gradually offset as time passes.
• Average account age. Opening new accounts or closing old ones changes the average age of your credit history. There is nothing to accelerate here.
• Hard inquiry recovery. New credit applications leave inquiries that typically affect your score for 12 months. You cannot speed this up.

Buying a house with bad credit, the realistic path

If your score is below 620, a conventional loan is off the table for now. The realistic options:

• FHA loan, 580+ score, 3.5% down, viable if you find a lender without a 620 overlay. Shop explicitly for this.
• FHA loan, 500–579 score, 10% down, requires a larger down payment but remains available to buyers who can't reach 580.
• VA loan, if you are eligible (active duty, veteran, surviving spouse), some VA lenders work with scores as low as 550. No official minimum exists; lender overlays vary widely.
• USDA loan, for rural and suburban properties, 640 is the floor for automated underwriting. Manual underwriting with scores below 640 is possible through certain lenders.
• Delay by 60–90 days and hit 620, for a buyer at 590–615, resolving one collection account or paying down utilization may be enough to cross the threshold. Run the numbers on whether the delay is worth it versus closing now at worse terms or a smaller purchase.

If collections are what's holding your score below the threshold, a debt validation letter is the first action, many debt buyers cannot validate, which removes the account without payment and without restarting the statute of limitations.

If your closing is in 30 days or less

Frequently asked questions