What credit score do you need to buy a house in 2026?

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The exact credit score you’ll need to buy a house depends on the type of mortgage you want. Government-backed mortgages are more flexible in this area and generally feature competitive rates, even with lower credit scores. Conventional loans, the most popular mortgage type, used to come with a firm minimum credit score threshold. But with recent changes to Fannie Mae and Freddie Mac credit guidelines, prospective home buyers may now have more flexibility.

There are five major types of mortgage loans, each with different qualifying minimum credit scores.

Conventional loans are mainstream mortgages that most lenders offer. Fannie Mae and Freddie Mac have recently eliminated their minimum credit score requirement and shifted the focus to other data points, including the loan purpose, property characteristics, borrower reserves, and debt levels.

So, instead of a mandatory qualifying FICO score of 620, the VantageScore 4.0 and FICO 10T models (expected to be released in early 2026), along with alternative credit data such as utility, rent, and phone service payments, are now considered when making lending decisions.

That doesn’t mean lenders won’t set their own guidelines, as they are free to continue using traditional FICO scores rather than the newly adopted creditworthiness models. Furthermore, a higher credit score always helps boost your approval odds, assuming you have a strong financial profile overall.

Buying a more expensive home, typically more than $832,750, requires qualifying for a jumbo loan. For these higher-value loan amounts, lenders typically look for a credit score in the 700s.

You can qualify for an FHA loan with a credit score of 500 if you put at least 10% down. With a FICO score of 580 or better, you’ll only need a down payment of 3.5%.

Either way, lenders perceive low-credit-score home buyers as presenting a higher risk, so you’ll likely pay a higher interest rate than someone with a credit score of 620 or higher.

The Department of Veterans Affairs backs VA loans to military service members, veterans, and eligible surviving spouses, and doesn’t mandate a minimum credit score.

However, the VA doesn’t issue the loans directly; authorized VA mortgage lenders do, and they typically require a credit score of 620 or higher.

Houses and properties in rural areas and suburbs may be eligible for USDA loans. Low- and moderate-income borrowers will likely need a credit score of 580 or higher to qualify for a USDA mortgage.

Credit bureaus gamify your debt management skills by awarding points in the form of a credit score. The higher your score, the more creditworthy you are — at least, that’s the algorithm’s opinion.

Credit reporting agencies such as Equifax, Experian, and TransUnion track your payment history, and FICO translates that data into a score. In fact, FICO has over 40 scoring models for various industries and purposes.

Here are the factors that are used to calculate the credit score needed to buy a house, according to FICO:

• Payment history (35%): The record of whether you’ve paid on time or not. You’ll want to make sure this is accurate.

• Amounts owed (30%): This is referred to as “credit utilization” and measures your total debt, including credit card balances and things like vehicle and personal loans. Less is best.

• Length of credit history (15%): Remember when you got your first credit card? FICO does. The longer you’ve had credit, the better.

• New credit (10%): The number of new credit accounts you’ve opened recently. Opening too many accounts in a short period can ding your credit.

• Credit mix (10%): The various types of credit you have, including installment loans, credit cards, and a mortgage. It’s a bit of a mystery how credit mix factors into the formula, because experts say you don’t need to have one of each.

Credit scores paint a picture of how you’ve managed debt obligations over time. A strong credit score signals to mortgage lenders that you’re less likely to default on your loan payments. In turn, you’ll likely qualify for the most competitive rates the lender offers, assuming everything else checks out on your home loan application.

That said, a lower credit score can be a cause for concern. You could have the means to pay your mortgage on time each month. However, lenders may still view you as a riskier borrower even if you’ve turned a new leaf. And if you’re approved for a mortgage, you may be offered a higher interest rate to compensate for the increased risk of defaulting on your home loan.

Again, Fannie Mae and Freddie Mac no longer impose credit score minimums. This is good news for consumers with lower credit scores or thin credit files, assuming they can identify lenders who look beyond typical credit histories of consumers and focus more on alternative and trended data. Otherwise, a lower credit score can still be a deal breaker.

Although your credit score is important, qualifying for a mortgage is about more than just your credit score. Here are some other details lenders consider:

• Debt-to-income ratio(DTI): Your debt is divided by your gross (before taxes and deductions) income. Let’s say your total monthly debt (including your mortgage) is $2,000, and your gross monthly income is $5,000. 2,000 / 5,000 is 0.4, so your DTI ratio is 40%. This is a major factor that lenders look at. You’ll want your DTI to be in the low 40% range or less. The mid-30% range (or lower) is a real sweet spot.

• Down payment: Again, some loan programs allow a down payment as low as 3%. The more down payment you can make, the lower your monthly payment will be.

• Cash reserves: Lenders require sufficient funds in the bank to cover the down payment and closing costs.

• Employment: Proof of a steady job and a regular income is a must. Most lenders want to see at least two years of employment in the same position or industry before approving you for a mortgage.

See the current mortgage rates by credit score.

The FHA’s low FICO-500 hurdle proves that buying a house with bad credit is possible. The question is: Should you?

It depends. If you hit a rough patch, but have a sizeable down payment, hefty reserves, and stable employment, an approval could be on the horizon. Still, you risk taking on a mortgage with a significantly higher interest rate than you’d get with a solid credit score. You also limit your options, as many home loan programs require a score of at least 620 to qualify.

But with the recent changes, you could be in luck with a conventional loan. If you can find a lender that considers trended and alternative credit data when you apply, you could still be in luck.

Ultimately, if your credit score is in the 500 range, taking the time to improve it will set you up for long-term success in homeownership later.

But if you want to make your homeownership dreams a reality sooner rather than later, here are some tips:

• Shop around and compare rates. Don’t settle for the first lender you find. Explore what various mortgage lenders have to offer before formally applying for a home loan to find the best terms available to you.

• Get a co-signer. It’s also worth bringing a mortgage co-signer with a solid income and good or excellent credit on board to help you access better terms. It’s vital to keep the home loan in good standing, though. Otherwise, the responsibility for monthly mortgage payments falls on the co-signer, and late payments damage both parties’ credit scores.

• Consider a refinance. Once your credit score improves, plan to refinance your home loan to secure a more competitive rate and lower monthly mortgage payments. A word of caution: If refinancing restarts the clock on your loan term, you could pay more interest over the life of the loan.

It’s simple, but that doesn’t mean it’s easy. Here are six steps to improving your credit score:

1. Reduce debt. Pay off or lower credit card balances to build your available credit, which lowers your utilization rate and could help boost your credit score.

2. Pay on time. Aim for zero late payments, as this is the most significant factor in the credit scoring equation.

3. Bring past due accounts current. If you’re behind on any open accounts, contact the creditors and pay the outstanding balance or arrange payment plans to bring them up to date.

4. Don’t close old accounts that are in good standing. Doing so negatively impacts your average age of accounts (or credit age), which could ding your credit score.

5. Only apply for credit as needed. Again, too many applications for credit in a short window could mean bad news for your credit score.

6. Correct any errors on your credit report. Retrieve your free reports from annualcreditreport.com, review them for errors, and file disputes promptly with the credit bureaus if needed.

You may be positively impacted by some changes being implemented that are related to home-buying credit scores.

• Lenders will shift focus to FICO 10T and VantageScore 4.0 models, which are alternatives to the traditional FICO score used by lenders when evaluating mortgage applications. This will expand borrowing opportunities for households with limited credit histories by considering rent and utility payments as part of their credit history.

• FICO will begin licensing its data directly to lenders rather than only through the three major credit bureaus. This will reduce lenders’ costs, which, with enough consumer pressure, may be passed on to borrowers.

Yes, there are loan programs accessible to borrowers with lower credit scores. FHA loans are a popular option, as they require a 500 score with 10% down (or a 580 score with 3.5% down). Keep in mind that the lending process could be more challenging with poor credit, and you likely won’t qualify for the best interest rate.

A credit score in the mid-to-high-700s makes it easier to get approved and access the best mortgage rates. If your score isn’t quite as high but you’d like to buy a home in 2026, work on improving it before applying for a home loan.

Absolutely. The most competitive rates on mortgage products are generally reserved for borrowers with higher credit scores. A slightly lower rate could result in thousands of dollars in savings over the life of the loan. So, it’s worth waiting until you have a strong credit score to apply for a home loan.

Laura Grace Tarpley edited this article.