Many buyers assume they need perfect credit to buy a home. That’s not true — but your credit score does matter. Here’s what it actually means, how it affects your options, and what you can do about it.

What Lenders Are Looking At

Your credit score is a three-digit number (typically 300-850) that reflects your credit history — how reliably you’ve paid debts, how much credit you’re using, and how long you’ve had accounts open.

Lenders use it as one factor in determining whether to approve your mortgage and what interest rate to offer. But it’s not the only thing they look at. Your income, debt-to-income ratio, employment history, and savings all play a role.

Minimum Scores by Loan Type

Different loan programs have different minimums:

• Conventional loans: Typically 620+, though some programs go lower
• FHA loans: As low as 580 with 3.5% down, or 500 with 10% down
• VA loans: No official minimum, though most lenders prefer 620+
• USDA loans: Typically 640+

These are general guidelines — individual lenders may have their own requirements.

How Your Score Affects Your Interest Rate

Here’s where your score really makes a difference. A higher score usually means a lower interest rate, and even a small rate difference adds up significantly over a 30-year mortgage.

For example, the difference between a 6.5% and a 7.0% interest rate on a $350,000 mortgage is roughly $120 per month — or over $43,000 over the life of the loan.

Quick Wins to Improve Your Score

If you’re not where you want to be, these steps can help:

• Pay down credit card balances. Aim to use less than 30% of your available credit.
• Don’t open new accounts right before applying for a mortgage.
• Check your credit report for errors. Mistakes happen, and fixing them can boost your score quickly.
• Keep old accounts open. Length of credit history helps your score.
• Make every payment on time. Payment history is the single biggest factor.

Your Score Isn’t the Whole Story

A lower score doesn’t mean you can’t buy. It means your options may look different — a different loan program, a slightly higher rate, or a larger down payment. But the door is still open.

A good agent works with buyers at every stage and can connect you with lenders who specialize in your situation — whether your credit is excellent or still a work in progress.