The minimum credit needed to buy a house is determined by the type of loan. You will need a FICO score of at least 620 in order to qualify for a loan to buy a house.
If your credit score is less than 620, you may be able to qualify for an unconventional loan.
Credit Score Minimums by Loan Type
|Type of Loan||Minimum FICO® Score|
|FHA loan requiring 3.5% down payment||580|
|FHA loan requiring 10% down payment||500-579|
|Veterans Affairs (VA loan)||580|
|U.S. Department of Agriculture (USDA loan)||640|
Conventional Loan: 620
A conventional mortgage is any type of home buyer’s loan. This loan is not offered or secured by a government entity. Instead, conventional loans are available through private lenders such as commercial banks, mortgage banks, or credit unions.
With a credit score of 620, a borrower may be able to get a conventional loan. Conventional loans may have higher qualifying standards. Some conventional lenders may require downpayments as high as 20% of the purchase price. If you pay less than 20%, you may be required to pay private mortgage insurance (PMI). PMI protects the lender—not you—if you stop making payments on your loan. Some lenders may charge a higher interest rate, rather than charge PMI.
Federal Housing Administration Loans (FHA Loan): 500s
If you have a credit score in the 500s, your best chance for a home loan may be one insured by the Federal Housing Administration (FHA). FHA loans allow down payments as low as 3.5%. To qualify, you’ll need a FICO score of 580 or better. If you still qualify and your score is less than 580, you may be required to make a 10% down payment.
Department of Veterans Affairs VA Loan): 600s
These mortgages are guaranteed by the Department of Veterans Affairs. To qualify for a VA Loan, you must be a veteran, an active-duty member of the military, or an eligible spouse. VA loans don’t have a government-set minimum credit score to buy a house.
VA lenders choose their own minimum credit scores. Typically, they select customers with scores in the mid 600s and upwards.
U.S. Department of Agriculture USDA Loan): 600s
Like VA loans, home loans from the U.S. Department of Agriculture don’t have a set minimum credit score — and lenders can require their own score minimums. But if your score is over 640, you could be eligible for streamlined credit processing on a USDA loan.
Jumbo Loan: 700
A jumbo loan is a mortgage used to finance properties that are too expensive for a conventional conforming loan. This limit is set by the Federal Housing Finance Agency (FHFA).
The loan limits are determined by the cost of homes in the area where the property will be located. In Georgia, the current conforming loan limit is $647,200.
Typically, credit scores of at least 720 are needed to qualify for this type of loan. The higher the score, the better the interest rate.