What Credit Score Do You Need to Buy a House? A 2024 Guide

For most U.S. homebuyers, the minimum credit score needed to buy a house is 620 for a conventional loan. However, government-backed loans like those from the Federal Housing Administration (FHA) may accept scores as low as 500 with a larger down payment. Your credit score is a primary factor lenders use to determine your mortgage eligibility and the interest rate you'll receive, directly impacting your monthly payment and long-term costs.

How Does Your FICO Score Affect Your Mortgage?

Your FICO score (a credit score created by the Fair Isaac Corporation) is a numerical representation of your credit risk, ranging from 300 to 850. Lenders rely heavily on this score during the mortgage application process. A higher score signals to lenders that you are a lower-risk borrower, which typically qualifies you for better loan terms. According to data from Freddie Mac for late 2024, the average rate for a 30-year fixed-rate mortgage was approximately 6.27%. Even a small difference in your interest rate, influenced by your credit score, can amount to tens of thousands of dollars over the life of the loan.

What Are the Minimum Credit Score Requirements by Loan Type?

Different mortgage programs have specific credit score thresholds. Understanding these can help you identify which loan you might qualify for.

• Conventional Loans: These are the most common mortgages and are not insured by a government agency. They typically require a minimum FICO score of 620. Conventional loans must meet standards set by government-sponsored entities like Fannie Mae and Freddie Mac.
• FHA Loans: Insured by the Federal Housing Administration, these loans are designed to help buyers with lower credit scores or smaller down payments. The minimum score for an FHA loan is 500 with a 10% down payment, or 580 if you put down only 3.5%.
• VA Loans: Available to veterans, active-duty service members, and eligible spouses, VA loans are guaranteed by the Department of Veterans Affairs and often have more flexible credit score requirements, though lenders may set their own minimums.

It's important to note that these are minimums. Based on our experience assessment, individual lenders may have stricter requirements, and a higher score will always work in your favor.

What Is the Average Credit Score for Homebuyers?

FICO reports that the national average credit score saw a slight decrease to 715 in 2024. This shift is attributed to increases in credit utilization and delinquency rates. Furthermore, FICO data shows a notable change in the distribution of scores. In 2021, 38.1% of the U.S. population had a score between 600 and 749. By 2025, that figure had decreased to 33.8%, indicating a potential tightening of credit conditions for a segment of the population.

How Can You Improve Your Credit Score to Buy a Home?

If your score is below the desired threshold, you can take proactive steps to improve it. Rebuilding credit is a process that requires patience, often taking several years to see significant improvement after a major negative event. Key strategies include:

• Pay all bills on time: Your payment history is the most significant factor in your FICO score.
• Dispute errors on your credit report: Regularly review your reports from the three major bureaus (Equifax, Experian, and TransUnion) and contest any inaccuracies.
• Lower your credit utilization ratio: This means paying down outstanding debt amounts, especially on credit cards.
• Avoid closing old credit accounts: The length of your credit history contributes to your score, so keep older accounts open, even if you don't use them frequently.
• Always pay at least the minimum due: Consistent, on-time payments are crucial.

Before you start house hunting, the most critical step is to check your credit score and report. This allows you to address any issues and understand what loan types and interest rates you can realistically expect, putting you in a stronger position to make a purchase.