Often, a mortgage is the biggest loan you’ll take out in your lifetime — so it makes sense that lenders require a minimum credit score for mortgages. A good score suggests to lenders that you can make your payments on time. If you have below average credit, you still have options when it comes to a mortgage. But if you have a higher credit score, you'll generally qualify for more loan options and lower interest rates.

Credit score requirements differ by lender and loan type. For example, conventional loans typically require a higher credit score than government-backed loans insured by the Federal Housing Administration.

Whether your credit is flawless or average, here’s what to expect when you apply for a mortgage.

For most loan types, the credit score needed to buy a house is at least 620. However, a higher score significantly improves your chances of approval. Borrowers with scores under 650 tend to make up just a small fraction of closed purchase loans.

Applicants with scores of 740 or higher generally get the lowest interest rates.

Though you may be able to get a conventional loan with a credit score as low as 620, these mortgages often require higher scores.

• Average credit score for conventional loan: The average FICO score for home buyers using conventional loans is 749, according to the most recent data available from ICE Mortgage Technology.
• Higher credit score = lower PMI: Borrowers with higher scores also earn a break in the cost of private mortgage insurance, or PMI, which is required if they make down payments of less than 20% on a conventional loan. With a 10% down payment, a 620 borrower will pay 1.1% in PMI, according to Joe Parsons, a branch manager and senior loan officer at Pinnacle Home Loans in Dublin, California. A 760 FICO borrower would pay just 0.30%, he says.

If you have a credit score in the 500s, your best chance for a home loan will be one insured by the Federal Housing Administration. That said, lenders can impose their own credit minimums for FHA loans — and borrowers who just meet these minimums will likely have a harder time getting approved.

• Average credit score for FHA loan: According to the most recent data available from ICE Mortgage Technology, the average FICO score for home buyers with FHA loans is 668.
• Lower credit score = higher down payment: FHA loans allow down payments as low as 3.5%. However, to qualify for a low down payment FHA loan, you’ll need a FICO score of 580 or better. With a credit rating of 500 to 579, you'll be required to make a 10% down payment.

If a borrower has a credit score below 600, a lender would likely lend to them only if other aspects of their financial situation were secure.

“Someone with a 500 credit score is likely to have some combination of collection accounts, liens and judgments,” Parsons says. “Even though FHA will insure a loan with a 500 score, the lender will require that collections, judgments and most liens be paid off before closing.”

Mortgages guaranteed by the Department of Veterans Affairs, better known as VA loans, don't have a government-set minimum credit score to buy a house. Their main qualification is that you be a veteran, an active-duty member of the military or an eligible spouse.
That said, VA lenders choose their own minimum credit scores. These vary, but are generally in the low to mid-600s.

According to the most recent data available from ICE Mortgage Technology, the average credit score for VA home buyers is 711.

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.

In order to get a mortgage that's larger than the conforming loan limit — better known as a jumbo loan — most lenders will want to see a credit score that's around 700 or higher. Because lending that much money is inherently risky, lenders look for potential home buyers to have solid financials, including a strong credit score.

With a FICO score of 740 or higher, you’re likely to get the best jumbo mortgage rates. Using a mortgage calculator can make clear how even a slightly lower rate can make a big difference.

Your credit score isn’t the only thing lenders look at when determining if you qualify for a mortgage. Other key factors include:

• Debt-to-income ratio (DTI): This calculation, written as a percentage, lets lenders know if you can handle taking on additional debt. DTI compares all your monthly loan payments (debt) to the pre-tax, or gross, amount you earn every month (income). The lower, the better: Ideally, your DTI should be below 36% to qualify for the best mortgage options.
• Loan-to-value ratio (LTV): This measures how much money you’ll owe on the loan compared to what the house is worth. A lower LTV makes you less risky to lenders. To bring down the LTV, make a larger down payment.
• Income and employment history: Most lenders will verify your employment and see if you’ve been earning a steady income for the past two years. These are key indicators that you’ll be able to repay your loan. However, if you’re retired or not actively working, your lender will ask for other forms of proof that you can make your monthly mortgage payments.
• Savings and assets: Lenders also look at your overall net worth, such as your cash savings, retirement accounts, investments and other assets. This helps determine how long you could continue to make payments if you lost your main source of income.

Having bad credit — or no credit — may mean you’re unlikely to get a mortgage unless someone you know is willing to help out. Having a co-signer who has a better credit score could help you secure the loan.

Another option would be to have "a friend — or more likely a family member — purchase the home," add you to the title and then try to refinance into your name when your credit scores improve sufficiently, according to Ted Rood, a Missouri-based mortgage banker at The Federal Savings Bank.

If such assistance isn’t available to you, your best bet will be waiting and working on your credit.

If your score doesn’t qualify for a great rate or the type of mortgage you'd prefer, it might make sense to put off homebuying for a while and use the time to build your credit profile. Here’s how:

• Pay all bills on time: Payment history is the biggest of all the factors that affect your credit score.
• Maintain low credit card balances: Experts recommend you use no more than 30% of the limit on any credit card, and much lower is much better. How much of your available credit you are using is called your credit utilization, and it’s the second-biggest factor in your score.
• Check your credit reports: Look for score-lowering errors. If you find something, dispute it. Through December 2023, you are entitled to at least one free credit report from each of the three credit bureaus, Experian, Equifax and TransUnion, every week.
• Keep credit cards open: Closing a card reduces the amount of available credit you have, which can send your credit utilization up and ding your score. Make a charge occasionally and pay it off promptly; that keeps the issuer from closing your account for inactivity.
• Apply for new credit sparingly. If you’re trying to build up a thin credit file, you could add a new credit card, secured credit card or a credit-builder loan. Keep in mind you want six or more months to elapse between opening a new account and applying for a mortgage, so time applications wisely.

While you're working your way toward the credit score needed to buy a house, check your progress with a free score; some credit cards and many personal finance websites offer them. (NerdWallet offers a free credit score that updates weekly.)

Some mortgage lenders check older versions of the FICO score (FICO 2, 4 and 5). If you want to see where you stand on those so you know exactly what mortgage lenders will see, you’ll have to purchase a comprehensive FICO report. You can do that at myFICO.com, then cancel the monthly service rather than pay an ongoing fee.

Be sure to cancel before the next billing cycle starts; the monthly subscription fee will not be prorated. However, if you’re near or in the excellent credit score range on a free score source, you don’t need to pay to check your FICO scores. You almost certainly have good enough credit to qualify for the best rates.