What Credit Score is Needed to Buy a House?

The short answer to this question is that it depends. There are several types of loans available, and the type of loan you’re targeting will have its own minimum credit score.

For example, let’s say you want to take out a conventional mortgage. In that case, you’ll need a credit score of at least 620. Some experts recommend you raise it a little higher than that to be at least 660, but it’s understandable you don’t always want to wait for that to happen.

Another example is an FHA loan. If you have some money to put down, you can do an FHA loan and put down 3.5% of the loan as a downpayment. In that case, you can get by with a score of at least 580.

If you have even more money to put down as a downpayment, you may be able to get a loan with a credit score of 500. The problem is you’d need an FHA loan and 10% down payment to qualify for that type of mortgage.

Which one of these best fits your current situation? Are you all set, or do you need to boost your score? If your score needs to go up, the rest of this blog post is for you.

What Does Your Credit Score Mean?

At a high level, your credit score is a way for the financial world to know how responsible you are with your money. A higher score means you’re someone who pays bills on time.

Something to note is you can’t build credit without a form of credit in your name. The most common forms of credit are. . .

These are tracked by the three credit bureaus, and each will generate a credit score for you.

How to Build Your Credit Score

The most important thing is to pay your bills each and every month. If you miss a payment, your score decreases. As long as you pay on time, it will get better over time.
There’s more to it than just paying bills on time though. Credit utilization also comes into play. Credit utilization is calculated by dividing your current debt to your maximum amount of debt allotted.

For example, let’s say you have a credit card. The rotating balance is about $3,000 and the maximum limit on the card is $10,000. In that case, your credit utilization is $3,000/$10,000 = 30%. Higher credit utilization is a bad thing. It indicates you aren’t able to pay off your debt quickly, so your credit score will suffer.

Another factor is how long your line of credit has been open. Keeping a credit card for years and years, even if you aren’t using it, is better than the alternative. Don’t close down credit cards because your credit score will suffer.


Do you need better credit to buy a home? Maybe – everyone’s situation is different. Give us a call at (877) 556-2655 and we’ll see what we can do to help you get into your dream home.

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