Can I Buy a House With Bad Credit?
In summary: Many people with low credit scores can still buy a house. FHA loans accept credit scores down to 580 with 3.5% down, and 500 to 579 with 10% down. Conventional loans run through automated underwriting no longer have the old 620 cutoff, and the VA sets no minimum. Lenders can still set their own floors on top of these, and a lower score typically means a higher interest rate and more cost over time. For many buyers, a bigger obstacle is a waiting period after a bankruptcy or foreclosure, or debt that’s affecting both the score and the mortgage application at once.
Maybe you checked your score before you started looking at listings, and it wasn’t the number you were hoping for. Maybe a lender has already told you no. Or perhaps you’ve come through a rough stretch, like a job loss, a medical bill that went to collections, or a divorce, and you’re trying to work out how long it’s going to follow you. Or maybe your card balances have been climbing for a while, and you suspect they’re the reason your score looks the way it does.
Whatever brought you here, the question underneath tends to be the same one: is buying a house still realistic, and if it is, when?
Buying a house with a low credit score is often still realistic, and the score turns out to be only part of the answer. Below certain points, a low score closes specific doors, but across most of the range, it mainly changes the price. And for a lot of people who describe their credit as bad, the thing actually standing between them and a mortgage isn’t the score at all.
One thing worth saying before we get into it: a low score is a record of what happened, not a judgment of the person it happened to. It tells a lender something about the past. It doesn’t tell the whole story of whether you’d keep up with a mortgage.
What credit score do you need to buy a house?
The minimum credit score you need depends on the loan, and for most loan types the answer is lower than people assume.
| Loan type | Minimum score | Down payment |
| Conventional (automated underwriting) | No fixed minimum since late 2025 for loans approved automatically by Fannie Mae or Freddie Mac’s own underwriting systems; 620 is still typical when a human underwrites the loan by hand | As low as 3% for first-time or income-eligible buyers (e.g., HomeReady) |
| FHA | 500 | 580+ qualifies for 3.5% down; 500–579 needs 10% down |
| VA | No VA minimum | Often none, for eligible service members, veterans, and surviving spouses |
| USDA | No single fixed number | Often none, for eligible rural areas and income levels |
Sources: Fannie Mae Selling Guide, B3-5.1-01, General Requirements for Credit Scores; Freddie Mac Single-Family Seller/Servicer Guide, Section 5203.2, Credit Scores; U.S. Department of Housing and Urban Development, Handbook 4000.1; U.S. Department of Veterans Affairs, VA Home Loan Overview for Homebuyers; USDA Rural Development, HB-1-3555, Chapter 10.
FHA has the clearest, most publicly documented rules. If your score is 580 or higher, you are eligible for maximum financing, the familiar 3.5% down payment. Between 500 and 579, the loan is capped at 90% of the home’s value, so you need 10% down. Below 500, you generally aren’t eligible for an FHA loan. If the down payment is the part you’re working on, how to save for a down payment when money is tight covers what each loan type actually requires.
VA loans don’t come with a minimum credit score set by the VA itself. Lenders still use your credit history to judge how you handle debt, so the floor you run into is whatever that lender sets.
USDA doesn’t publish one fixed number either. Requirements can differ depending on how the loan is underwritten, and lenders can add their own criteria.
Conventional loans changed recently, and the change is specific: since November 2025, Fannie Mae’s guidelines no longer set a minimum credit score for loans run through its automated underwriting system, replacing the old 620 floor with a broader evaluation of your credit history. Freddie Mac made the same change to its own system first. That doesn’t mean every conventional lender will approve a lower score, and it doesn’t apply across the board — loans underwritten by hand still generally require a 620 minimum (640 for adjustable-rate loans), and private mortgage insurers can set their own minimums too, which matters if you’re putting down less than 20%. For the specifics of your situation, a loan officer can tell you where a given lender actually draws the line, since this is an area where the rules can shift and vary by lender.
Which brings up the part every one of these programs has in common: the minimum is the lowest a lender is allowed to go, not the lowest every lender will go. Lenders layer their own requirements on top, often called overlays, and two lenders offering the same type of loan can have different floors. If one says no, that isn’t the program saying no.
What does a lower credit score actually cost?
A lower score does most of its work here, through cost, even when it doesn’t stop you from qualifying at all.
The biggest cost is usually the interest rate. Lenders generally charge higher rates to borrowers with lower scores, and the rate gap between scores is worth real money. On a $300,000, 30-year loan, a gap of even three-quarters of a percentage point (say, 6.00% versus 6.75%) works out to about $147 more a month, or roughly $53,000 more in interest over the life of the loan. myFICO’s Loan Savings Calculator will run the comparison with your own numbers. The actual rate you’d be offered is worth getting directly from a lender, since rates shift often and vary by program.
Private mortgage insurance adds to the gap. On a conventional loan with less than 20% down, you’ll typically pay private mortgage insurance (PMI), an added monthly cost that protects the lender if you default. What PMI costs is also generally tied to your score. A higher score usually means a lower rate on both fronts at once.
Fannie Mae publishes its own pricing chart showing exactly how credit score affects this cost by loan type and down payment, if you want to see the specifics for your situation. It also offers pricing waivers for certain first-time and lower-income buyers — worth asking any lender you’re considering whether one applies to you before assuming the standard pricing is your only option.
When is the credit score not the real problem?
For a lot of people who say they have bad credit, the score is really a symptom of something a lender cares about just as much, or more: debt.
A high debt-to-income ratio is where many applications run into trouble. Your score can clear every bar and the loan can still fail because the new mortgage payment pushes your debt-to-income ratio too high. It’s easy to miss, because the ratio a lender uses includes the mortgage you’re applying for, not the rent you pay now, so it’s usually higher than the one you’d work out yourself. DTI and getting a mortgage goes through how that’s calculated, and the DTI calculator will run both versions of the number for you.
A lower score can also limit how much house you can afford, because a stronger score is one of the things that can let a lender approve a higher debt-to-income ratio. So a low score and a high ratio tend to make each other worse at the same time: the score lowers the ceiling while the debt pushes you toward it.
The score a lender uses is probably not the one in your banking app. When a lender pulls your credit from all three bureaus, Fannie Mae’s guidelines generally call for using the middle of the three scores, and the lower of the two if only two are available. A free score from an app can come from a different model or a single bureau, so what you see there may not match the score a lender actually pulls. If you want a closer estimate, ask a lender or a loan officer which model they use and whether they can share your score from all three bureaus, rather than relying on a single app score.
It’s also worth knowing the specific scoring model can vary by lender now, not just the score itself, which is one more reason the number you see may not match what a lender pulls. None of this changes the tri-merge, middle-of-three-scores process above — it’s just one more variable behind it.
The same middle-of-three, lower-of-two rule also changes how a co-borrower helps. Under those guidelines, a loan with two borrowers is generally priced on the lower of the two scores, not the higher one. So adding someone with excellent credit to your application can strengthen it through their income, but it doesn’t automatically fix the pricing tied to your own score — worth asking a lender directly how it would work in your case.
A recent bankruptcy or foreclosure is its own, separate situation, and no credit score fixes it on its own. Both generally come with a waiting period before you’re eligible for a new mortgage. For FHA loans, HUD generally requires two years from a Chapter 7 discharge and three years after a foreclosure. For conventional loans, Fannie Mae’s guidelines generally require four years after a Chapter 7 discharge and seven years after a foreclosure, with shorter waits possible when a documented one-time event caused it. The exact timeline can still depend on your specific circumstances, so a loan officer can confirm where you stand.
What are your options if your score is low?
More than most people think, though none of them involve a shortcut.
FHA, if you’re at 580 or above. It’s the program built for this situation: 3.5% down, with mortgage insurance that isn’t priced on your score the way conventional loans typically are. Between 500 and 579 it’s still available, with 10% down.
Ask more than one lender. Because overlays vary, a no from one lender tells you about that lender. It’s worth asking at least two or three what their minimum actually is for the loan you want.
A co-borrower, for the right reason. If your income is the weaker part of the application, a co-borrower can make a real difference. A co-borrower’s stronger credit doesn’t automatically carry over to how the loan gets priced, so it’s worth asking a lender directly how that works for your situation.
Time, spent on the things that actually move a score. Not everything does, at least not quickly.
- Credit card balances are generally the fastest lever. Credit utilization updates as your balances do, so lower balances can show up relatively quickly. What matters for timing is your statement closing date rather than your due date, and why is my credit score going down covers how that works.
- Errors on your reports can be disputed, and removing one that shouldn’t be there can move a score.
- Late payments and collections fade with time rather than effort. They tend to count less as they age, and a recent record of on-time payments carries real weight.
And how long each of these takes, alongside saving a down payment and getting your ratio where it needs to be, is what how long will it take before I can buy a house maps out.
What if credit card debt is the real obstacle?
For a lot of people, credit card debt turns out to be two problems at once.
Credit card debt can affect a mortgage application from two directions. High balances can push your utilization up, which can hold your score down. And the minimum payments on those balances count toward your debt-to-income ratio, which a lender measures with the new mortgage payment already included.
Paying the minimum doesn’t fix either one quickly. The minimum shrinks as the balance does, so progress stalls, and the balance stays high enough to keep utilization where it is. That’s why someone can make every payment on time and still see their utilization and their ratio stay stuck.
If that sounds like your situation, the order matters. Buying first means taking on the largest payment you’ll likely ever have while the debt is still shaping your terms. Dealing with the debt first is slower to start, but it means the mortgage you eventually take on isn’t competing with it for the same paycheck.
That’s often a debt problem — not necessarily a mortgage-timing one — and it may be worth addressing on its own terms before focusing too far ahead on a mortgage timeline. If the minimum payments have become hard to keep up with, you can explore your options at no cost to see where you stand.
Final Words
A lower credit score mostly changes what a mortgage costs, not whether you can get one. FHA goes down to 500 with a bigger down payment, many conventional loans no longer have a fixed 620 floor, and VA loans don’t have one at all. What you’ll actually run into is the lender’s own minimum, which varies, and a price that rises as your score falls.
Before you spend months working on the number, it’s worth checking whether it’s really the obstacle. A waiting period after a bankruptcy or foreclosure runs on its own calendar, and a debt-to-income ratio that doesn’t clear will stop a loan that a strong score couldn’t save. If credit card debt is behind both your score and your ratio, that’s often the one to deal with first.
The score is where most people start. It’s not always where the answer is.
Frequently Asked Questions
The minimum credit score to buy a house depends on the loan type. FHA loans accept scores as low as 500 with 10% down, or 580 with 3.5% down. VA loans have no minimum set by the VA itself. Since November 2025, conventional loans run through automated underwriting no longer have the old 620 cutoff, though loans underwritten by hand still generally require 620 (640 for adjustable-rate loans). Individual lenders often set their own, higher minimums on top of any of these, so it’s worth asking more than one.
You can typically buy a house after bankruptcy, once a waiting period has passed. For FHA loans, that’s generally two years from a Chapter 7 discharge, per HUD’s guidelines (Handbook 4000.1, Section II.A.4). For conventional loans, Fannie Mae generally requires four years from a Chapter 7 discharge, or two years with documented extenuating circumstances. In practice, this waiting period is often a bigger factor in your timeline than your score is — a loan officer can confirm the specifics for your situation.
A co-borrower can help with some parts of a mortgage application, particularly if their income strengthens it, but under Fannie Mae’s guidelines a joint loan is generally priced on the lower of the two borrowers’ scores, not the higher one. Adding someone with excellent credit won’t automatically fix pricing tied to your own score, though it can still help if their income is what the application needed most.
Credit card debt can affect your mortgage application in two ways at once: high balances can raise your credit utilization, which can lower your score, and the minimum payments count toward the debt-to-income ratio a lender calculates with your new mortgage payment included. Bringing balances down can help both at the same time, which is why it’s often the first thing worth addressing before applying.
Not by the VA’s own standards — the VA doesn’t set a minimum credit score. Lenders set their own minimums, and they vary, so a no from one VA lender doesn’t mean every lender will say the same.
Waiting can pay off, since a higher score typically means a lower rate and lower costs. Whether waiting is worth it also depends on what you’d pay in rent in the meantime and how home prices move where you live, which should I rent or buy right now works through. If your score is low mainly because of credit card balances and you have the means to pay them down, the wait may be shorter than you’d expect, since utilization can change relatively quickly once lower balances are reported — why is my credit score going down covers the 30- to 60-day window to expect. If paying them down isn’t realistic right now, the wait is likely to be longer, since the balance won’t move until that does.
The information on this site is provided as a general resource and does not constitute legal, tax, or financial advice. While Beyond Finance strives to ensure accuracy, this content, including any third-party sources referenced, should not be the basis for any financial decision. For guidance specific to your situation, we recommend consulting a qualified professional.
