What Credit Score Do You Need to Buy a House?

The credit score needed to buy a house depends on the loan type, lender, down payment, income, debt, and overall financial picture. Many conventional loans commonly look for a score around 620 or higher, while some government-backed loan programs may allow lower scores. However, meeting a minimum credit score does not automatically guarantee mortgage approval.

There is no single credit score that applies to every homebuyer. Two people with the same score may have different options depending on their income, savings, debt, down payment, and loan program.

That’s why it is usually better to ask, “What do I need to be ready to buy a home?” instead of only asking, “Is my credit score high enough?”

Common Credit Score Guidelines by Loan Type

Credit score requirements can vary by lender, loan program, and borrower situation. However, these general ranges can help explain why there is not one universal answer.

Loan Type	General Credit Score Guidance	What to Know
Conventional loan	Often around 620 or higher	Higher scores may help with more competitive terms.
FHA loan	May allow lower scores in some cases	Down payment requirements can vary based on credit score.
VA loan	No official VA minimum, but lenders may set their own requirements	Available to eligible service members, veterans, and qualifying spouses.
USDA loan	Lender requirements may vary	Often used for eligible rural or suburban properties.

These are general guidelines, not approval guarantees. A local lender can review your full financial picture and explain what options may fit your situation.

Talk With a Mortgage Lender

Man sitting at table with hands on laptop keyboard and illustration of good to poor credit score meter with arrow in the middle

Why Your Credit Score Matters for a Mortgage

Your credit score gives lenders a snapshot of how you have managed borrowed money in the past.

It is based on things like payment history, credit card balances, length of credit history, credit mix, and recent credit activity. When you apply for a mortgage, lenders use that information to help evaluate risk.

Your credit score may affect:

Whether you qualify for certain loan options
What interest rate you may be offered
How much your monthly mortgage payment could be
Whether mortgage insurance may apply
How much flexibility you may have during the loan process

A higher credit score may help you qualify for more competitive loan terms. A lower score does not always mean you cannot buy a home, but it may affect which options are available or what steps you need to take first.

Think of your credit score as one part of your homebuying report card. It matters, but it does not tell the whole story.

Is Your Credit Score the Only Thing Lenders Look At?

No. Your credit score is important, but lenders usually look at several pieces of your financial life before making a mortgage decision.

They may review:

Your income

Lenders want to understand whether you have steady income to support a monthly mortgage payment. This may include wages, salary, self-employment income, or other documented sources of income.

Your employment history

A stable work history can help show that your income is reliable. If you recently changed jobs or income types, that does not automatically mean you cannot qualify, but your lender may ask for additional documentation.

Your monthly debts

This includes things like auto loans, credit cards, student loans, personal loans, and other recurring debt payments.

Lenders use this information to help understand your debt-to-income ratio, or how much of your income already goes toward debt.

Your down payment

The amount you put down can affect your loan options, monthly payment, and whether mortgage insurance may be required. While many people still believe they need 20% down, that is not always the case. Your lender can help you understand what down payment options may fit your situation.

Your savings

Savings can help cover a down payment, closing costs, moving expenses, repairs, and the little surprises that come with owning a home. Even a small cushion can make the transition into homeownership feel less stressful.

The type of home loan

Different mortgage options may have different requirements. For example, a fixed-rate mortgage, adjustable-rate mortgage, construction loan, or refinance may each work differently depending on your goals.

That bigger picture is exactly why it helps to talk with a lender before assuming you are ready — or not ready.

Woman looking at phone while holding credit card in her hand

What If Your Credit Score Is Lower Than You’d Like?

First, take a breath.

A lower credit score does not automatically mean homeownership is impossible. It may simply mean you need to understand your options, make a plan, or take a few steps before applying.

In some cases, a lender may be able to explain which loan programs could be worth considering. In other cases, they may recommend waiting while you work on improving your credit, lowering debt, or building more savings.

Either way, knowing where you stand is better than guessing.

Many people put off talking to a lender because they are embarrassed or afraid of hearing “no.” But a good lender is not there to judge your credit history. They are there to help you understand what your numbers mean and what your next step could be.

Sometimes the answer is, “You may have options now.” Sometimes the answer is, “Let’s work on a few things first.” Both are helpful.

Start the Conversation

How to Improve Your Credit Before Buying a House

If buying a home is on your mind, improving your credit score can be a smart place to start. You do not have to overhaul everything overnight. Small, consistent habits can make a difference over time.

Check your credit report for errors

Start by reviewing your credit report. Look for incorrect balances, accounts you do not recognize, duplicate accounts, or payments marked late that you believe were paid on time.

If something looks wrong, you can dispute it with the credit bureau reporting the information.

Pay bills on time

Payment history is one of the biggest factors in your credit score. If possible, set reminders or automatic payments so due dates do not sneak up on you.

Even one late payment can have an impact, so consistency matters.

Keep credit card balances manageable

Using a large portion of your available credit can affect your score. If you have credit cards, try to keep balances as manageable as possible compared to your credit limits.

For example, carrying a high balance on a card may make it look like you are relying heavily on credit, even if you are making payments.

Avoid opening several new accounts before applying

New credit applications can lead to hard inquiries, and opening multiple accounts in a short time may raise questions during the mortgage process.

If you are planning to buy a home soon, talk with a lender before opening a new credit card, financing furniture, buying a vehicle, or taking on another loan.

Pay down debt where possible

Lowering debt may help both your credit score and your debt-to-income ratio. That can make your overall financial picture stronger when you are ready to apply.

You do not necessarily need to pay off every debt before buying a home, but reducing balances can help.

Do not close old accounts too quickly

It may seem smart to close a credit card after paying it off, but closing older accounts can sometimes affect your credit history or credit utilization. Before closing accounts, consider asking a financial professional or lender how it may impact your situation.

Avoid big financial changes right before applying

A mortgage application looks at your full financial picture. Large purchases, new loans, job changes, or unusual account activity may create extra questions during the loan process.

If you are unsure whether a financial decision could affect your homebuying plans, ask first.

Talk to a lender before assuming you need to wait

This might be the most important tip.

Many buyers assume they need to spend months fixing their credit before speaking with anyone. But a lender can help you understand which changes may matter most. That way, you are not guessing or spending time on steps that may not move the needle as much as you think.

Find Out Where You Stand

Man and woman meeting with mortgage lender and looking at paperwork together

When Should You Talk to a Local Mortgage Lender?

You do not have to wait until your credit score is perfect, your dream home is picked out, or your down payment is fully saved before having a mortgage conversation.

In fact, talking to a local lender early can make the whole process feel less overwhelming.

A local mortgage lender can help you understand:

What your credit score may mean for your home loan options
How much home may fit your budget
What down payment options may be available
What costs to plan for beyond the down payment
Whether it makes sense to apply now or prepare a little longer
What steps could strengthen your application

At Farmers & Merchants State Bank, our team understands that buying a home is a big decision. Whether you are looking in Waterloo, Lake Mills, Marshall, or another nearby Wisconsin community, working with a local lender means you can ask real questions and get guidance from people who know the area.

Our home loan options are designed to help buyers find mortgage solutions that fit their needs, goals, and budget. Whether you are buying your first home, thinking about moving, refinancing, or exploring home equity options, we are here to help you take the next step with more confidence.

Meet With a Local Lender

Common Credit Score and Mortgage FAQs

Can I buy a house with a credit score under 700?

Yes, it may be possible to buy a house with a credit score under 700. Some loan programs may allow lower scores, depending on the lender, down payment, income, debt, and overall financial picture.

That said, a higher credit score may help you qualify for better rates or more loan options. If your score is under 700, it is worth talking with a lender to see where you stand.

Do first-time homebuyers need perfect credit?

No. First-time homebuyers do not need perfect credit to start the mortgage conversation.

Many buyers are still building credit, paying down debt, or learning how the home loan process works. A lender can help explain what your current score means and whether there are steps you can take before applying.

What is the minimum credit score for a mortgage?

The minimum credit score for a mortgage depends on the loan program and lender. Some conventional loans commonly look for a score around 620 or higher, while certain government-backed loan programs may allow lower scores. Requirements can change, so it is best to talk with a lender for current guidance.

Does checking my credit hurt my score?

Checking your own credit report or credit score is usually considered a soft inquiry and does not hurt your score.

However, when a lender checks your credit as part of a loan application, that may be considered a hard inquiry. If you are shopping for a mortgage, your lender can explain how credit checks work during that process.

How soon before buying a house should I check my credit?

It is a good idea to check your credit as early as possible, especially if buying a home is something you are considering within the next year.

Checking early gives you time to correct errors, pay down balances, build better habits, and understand what lenders may see when you apply.

Can paying off debt help me qualify for a mortgage?

It can. Paying down debt may improve your credit score and lower your debt-to-income ratio, both of which may help strengthen your mortgage application.

However, the best strategy can depend on your full financial picture. Before using a large amount of savings to pay off debt, consider talking with a lender so you understand how that decision may affect your down payment, cash reserves, and loan options.

Should I talk to a lender before improving my credit?

Yes, it can be helpful.

A lender may be able to point out which credit or financial steps are most important for your situation. That way, you can focus your time and energy on the changes that may actually help your homebuying goals.

What else matters besides credit score?

Lenders may also consider your income, employment history, monthly debts, down payment, savings, loan type, and overall ability to manage a mortgage payment.

Your credit score matters, but it is only one part of the decision.

Small house figure with keys and couple shaking hands with lender in the blurred background

Your Credit Score Is a Starting Point, Not the Whole Story

Buying a home can feel intimidating, especially when credit scores, mortgage terms, down payments, and interest rates all start to blur together.

Your credit score is an important starting point, but it does not define your entire homebuying journey. Whether you are ready to buy soon or just wondering where you stand, Farmers & Merchants State Bank can help you understand your options and take the next step with confidence.

Have questions about your credit score or home loan options?

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What Credit Score Do You Need to Buy a House?

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