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What Credit Score Do You Need to Buy a House?

5 min read

Last Updated: March 5, 2025

Table of contents

Key Takeaways

Your credit score is one factor that impacts your mortgage eligibility, along with income and debt.
Typically, higher credit scores help you qualify for lower interest rates on mortgage loans.
Using a credit card responsibly could improve your credit score, which may help you in the home-buying process.

A home is one of the most significant purchases some people make in their lives. As you begin the home-buying process, it’s essential to consider the factors influencing your mortgage rates, including your credit score.

Mortgage lenders look to your credit score as a window into your financial habits, including managing your credit cards and other debts. The better your credit score, the better your chances of qualifying for a mortgage. However, each lender has its own requirements.

Is there a minimum credit score you need to buy a house?

Your credit score is a three-digit number that reflects the information in your credit history (stored by a credit bureau). Your score accounts for your payment history, the amount of credit you’re using, and how long you’ve had access to credit, among other things. When you apply for credit, lenders use your score to estimate your future credit behavior (risk) based on your previous credit habits.

While your credit score plays an important role in qualifying for a mortgage, it’s just one of several factors to keep in mind. Your household income and debt also affect your mortgage rates.

Generally, lenders look for applicants with low debt-to-income ratios (DTI). Your DTI is the percentage of your monthly income that goes toward debts. Mortgage lenders often have specific DTI and credit score requirements for their loan products.

Your credit history gives lenders an idea of how you have managed debt. If you typically make payments on time and keep your balances low, lenders may be more likely to offer you a desirable mortgage rate.

How good and bad credit impacts buying a home

Your credit could play a role in determining the houses you can purchase. With a good credit score, you may qualify for a larger loan amount that will allow you to buy a more expensive home. Bad credit, on the other hand, may limit your options. If you’re eligible for a mortgage loan, your credit also plays a role in determining your interest rate and down payment requirements.

Usually, the higher your credit score, the lower your potential interest rate may be. Because people with a low credit score present more risk to mortgage lenders, they often charge more interest to offset that risk. This may lead to much higher costs for those with a low credit score.

If you have less-than-ideal credit but want to buy a home, you have a few options for improving your eligibility. You could ask a friend or family member with good credit to co-sign your loan. Alternatively, you may pay a larger down payment to reduce your mortgage interest rate.

What's a good credit score to qualify for a mortgage loan?

A mortgage lender might offer several different types of mortgage loans. Each loan type will have own set of criteria and may require different credit score minimums. Generally, higher scores are better. However, different loan types usually have their own minimum credit score requirement. Experian^® shows standard credit requirements for some mortgage types (they may still vary slightly depending on the lender). Some common options include:

Conventional mortgage: Conventional loans are the most common type of mortgage. They meet requirements set by mortgage companies Fannie Mae or Freddie Mac. For a conventional loan, the minimum required credit score is 620.
Federal Housing Administration (FHA) loans: These loans have lower minimum credit scores and may require a range of down payments. If your credit score is 580 or higher, you owe a 3.5% down payment. However, people with credit scores between 500 and 579 must pay a 10% down payment on an FHA loan.
Jumbo loans: As the name implies, jumbo loans are larger mortgages designed for properties that cost significantly more than the average home. Their typical credit score requirement of at least 700 exceeds other loan types.

How credit cards can help improve your credit score

You usually need a strong credit history to qualify for the best home loan terms. Responsible credit card use could help you build good credit in a few ways.

Your credit mix contributes to your overall credit score. If you already have personal or auto loans, a credit card introduces a revolving line of credit to the mix.

More importantly, the way you use your credit card has the most substantial impact on your score. By paying off your balance in full each month, you could avoid owing interest, and you may build your credit score. Even if you can’t always repay your entire balance, it’s important to pay your bills on time each month. A history of on-time payments could improve your credit score and show lenders you manage debt responsibly.

Did you know?

Building a good credit history now may help you secure more favorable home loan terms in the future. If you're looking for a new credit card that may help build credit with responsible use,¹ see if a Discover it^® Secured Credit Card is right for you.

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Another significant factor on your credit report is your credit utilization ratio—the percentage of your total available credit that you're using. Paying down your existing credit card debt will lower your credit utilization ratio and may improve your credit score.

The bottom line

While factors like your debt-to-income ratio, lender, and mortgage type influence your rates and eligibility, a higher credit score might give you an advantage when buying a home. Responsible credit card use could help improve your credit score, making your home-buying process smoother.

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