What Credit Score Do You Need to Buy a House?

Credit scores typically range from 300 to 850, and borrowers within a certain range can qualify for mortgage loans. While you don’t need a perfect 850 credit score to get the best mortgage rates, there are general credit score requirements you will need to meet in order to take out a mortgage.

Prospective home buyers should aim to have credit scores of 760 or greater to qualify for the best interest rates on mortgages.

Having a higher credit score makes a big difference in the amount of money you pay over the course of a loan. Borrowers with scores in the higher range can save thousands of dollars in interest payments over the life of a mortgage.

Minimum credit score required: 620

Conventional mortgage loans aren’t insured by a government agency, like the U.S. Department of Veteran Affairs or the U.S. Department of Agriculture. Instead, these loans follow standards set by government-sponsored mortgage loan companies, Fannie Mae and Freddie Mac.

Conventional loans may be secured by one of these companies or a private lender. These loans are more affordable and require a minimum 620 credit score. Down payment amounts vary.

Minimum credit score required: 680

A jumbo loan exceeds the maximum loan amount limits set by the Federal Housing Finance Agency. These loans aren’t eligible to be insured by Fannie Mae or Freddie Mac, which means lenders take on more risk in the case you default on payments.

Due to the larger loan amounts and riskier nature of these loans, borrowers need to meet higher credit score requirements of at least 680.

Minimum credit score required: 500 (with 10% down) or 580 (with 3.5% down)

An FHA loan is insured by the Federal Housing Administration and an option for borrowers who are deemed a higher risk due to low credit scores and little money to put toward a down payment.

• Minimum 500 credit score, needs 10% down payment

• Minimum 580 credit score, needs 3.5% down payment

Keep in mind that if you make a down payment less than 20%, lenders will probably require you to take out primary mortgage insurance (PMI) to cover the cost if you default.

Minimum credit score required: None officially, though many lenders prefer 620

A VA (Veteran Affairs) loan is insured by the U.S. Department of Veteran Affairs and designed for eligible members of the military community and their spouses. This type of loan doesn’t require a down payment.

Minimum credit score required: None officially, though most lenders prefer 640

A USDA loan is insured by the U.S. Department of Agriculture and meant for low- to moderate-income home buyers. Similar to a VA loan, the USDA doesn’t require a down payment and doesn’t set a minimum credit score requirement.