{"id":3368,"date":"2024-08-16T14:54:48","date_gmt":"2024-08-16T19:54:48","guid":{"rendered":"https:\/\/tomo.com\/blog\/?p=3368"},"modified":"2025-02-10T13:55:43","modified_gmt":"2025-02-10T18:55:43","slug":"what-credit-score-do-i-need-to-buy-a-home","status":"publish","type":"post","link":"https:\/\/tomo.com\/blog\/what-credit-score-do-i-need-to-buy-a-home\/","title":{"rendered":"What credit score do I need to buy a home?"},"content":{"rendered":"\n

The higher your credit score, the better the loan terms you’ll likely get. But you don\u2019t need perfect credit to buy a home. Generally, a score of 620 or above can get you in the door with a conventional loan. <\/a><\/p>\n\n\n\n


FHA loans<\/a>, which have more relaxed conditions, accept credit scores of 580 and above, and some lenders can accept a score as low as 500, but that will likely require a bigger down payment. The better your score, the better your chances of securing a good interest rate, so it\u2019s worth aiming higher if you can. Check out our FHA and Conventional loan guide for more info here<\/a>.<\/p>\n\n\n\n

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Should I improve my credit before getting a mortgage?<\/h3>\n\n\n\n

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Fixing your credit score isn\u2019t an overnight thing, so it might not make sense to wait too long if you already have credit that qualifies for a loan. But if you want to qualify for a lower interest rate, it can help to pay down any high credit card balances first. Here\u2019s where utilization comes in\u2014this is the percentage of your available credit that you\u2019re actually using. Keeping your utilization under 30% of your total credit limit is key because it shows lenders you\u2019re not maxing out your cards. <\/p>\n\n\n\n

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Paying off your debts will also boost your score, as it lowers your overall credit burden. Plus, avoid opening too many new credit accounts at once; it can ding your score with too many hard inquiries. If you spot any errors on your credit report, dispute them to get those fixed. Stick with these habits, and over time, you\u2019ll see your score climb.<\/p>\n\n\n\n

If you have a credit score below 580, it could be well worth the time to increase your score. It\u2019s totally doable with some discipline and patience. Start by paying your bills on time, every time. <\/p>\n\n\n\n

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What are lower credit score loan options?<\/h3>\n\n\n\n

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Low credit barrier loans are a great option for people who are working with a less-than-perfect credit score. These include FHA<\/a> loans, VA loans, and USDA loans, which are designed to be more flexible with credit requirements, often accepting scores in the 500-580 range. While you may see a higher interest rate or need to pay mortgage insurance, these loan offerings make it possible to get approved and move forward with your home purchase even if your credit isn’t sky-high. Having loans with lower credit score restrictions is a helpful way for more people to achieve homeownership in the United States.<\/p>\n\n\n\n

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What is the average credit score for people buying a house?<\/h3>\n\n\n\n

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When it comes to buying a home, credit scores tend to be a bit higher. Fannie Mae says that first-time homebuyers usually have an average credit score of about 746, and overall homebuyers average around 754. (Fannie Mae, established in 1938, supports the mortgage market by buying and guaranteeing loans from lenders. This helps lenders offer more mortgages to homebuyers. While Fannie Mae doesn\u2019t lend money directly to buyers, it works with lenders to make home loans more accessible through a secondary market.)<\/p>\n\n\n\n

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Credit Karma’s data shows that their members with mortgages have an average score of 705. This is way above the minimum score of 620 needed for conventional loans. Having a higher credit score generally means you can snag better loan terms and lower interest rates, which is always a win! <\/p>\n\n\n\n

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However, if your score is not in the 700s, don\u2019t stress, you can definitely buy a home with one lower than the average.<\/p>\n\n\n\n

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What are credit score ranges for homebuyers?<\/h3>\n\n\n\n

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Here’s how credit scores for homebuyers typically break down:<\/p>\n\n\n\n