What is the lowest credit score to buy a house?

The absolute minimum is 500 with an FHA loan, but you'll need 10% down. With a 580 score, FHA allows 3.5% down. Conventional loans typically require 620 minimum. VA loans have no official minimum but most lenders require 580-620. The lower your score, the higher your interest rate and the more you'll pay over the life of the loan.

How long does it take to repair credit enough to buy a home?

Most buyers can improve their score 50-100 points in 6-12 months by paying down credit card balances, disputing errors, and making on-time payments. Bankruptcies require a 2-4 year waiting period depending on loan type. Late payments stay on your report for 7 years but their impact diminishes over time.

Can a cosigner help me buy a house with bad credit?

Yes. A cosigner with strong credit can help you qualify for a mortgage you wouldn't get alone. However, the cosigner is equally responsible for the debt. If you miss payments, it damages their credit too. FHA, conventional, and VA loans all allow cosigners, though requirements vary by loan type and lender.

Should I wait to improve my credit or buy now?

If your score is below 580, waiting 6-12 months to improve it usually makes financial sense — you'll qualify for better rates and lower down payments. If you're between 580-620, buying with an FHA loan now might make sense if home prices are rising in your area faster than you can save. Run the numbers both ways with a lender.

Buying a Home with Bad Credit — Options and Strategies for 2026

Credit Score Requirements by Loan Type

Different mortgage programs have different credit thresholds. Understanding which loans you qualify for is the first step toward homeownership with less-than-perfect credit.

FHA Loan — Minimum 580 for 3.5% down payment; 500-579 requires 10% down. The most accessible option for low-credit buyers
Conventional Loan — Minimum 620 in most cases. Better rates start at 700+. Private mortgage insurance required below 20% down
VA Loan — No official minimum from the VA, but most lenders require 580-620. Available to veterans and active-duty military only
USDA Loan — Minimum 640 for streamlined processing. Some lenders accept lower with manual underwriting. Rural and suburban areas only

How Credit Score Affects Your Interest Rate

Your credit score directly determines your mortgage rate. A buyer with a 620 score might pay 1.5-2% more in interest than a buyer with a 760 score. On a $300,000 30-year mortgage, that difference adds up to $80,000-$120,000 in extra interest over the life of the loan. Even a 40-point score improvement can save thousands.

FHA Loans: The Bad Credit Lifeline

FHA loans are backed by the Federal Housing Administration and designed specifically for buyers who cannot qualify for conventional mortgages. They are the most popular choice for low-credit buyers for good reason.

Lower credit threshold — 580 minimum for the standard 3.5% down payment program
Higher debt-to-income ratio allowed — FHA may approve borrowers with up to 50% DTI in some cases
Mortgage insurance required — Both upfront (1.75% of loan) and annual MIP for the life of the loan
Property standards — The home must meet FHA minimum property requirements, which can limit options

Credit Repair Timeline

If your score is below 580, spending 6-12 months on credit repair before applying for a mortgage usually saves you far more than buying immediately at a higher rate.

Quick Wins (30-90 Days)

Dispute errors — Check all three bureaus (Equifax, Experian, TransUnion) and dispute any inaccuracies
Pay down credit cards — Get utilization below 30%, ideally below 10%, for the fastest score boost
Become an authorized user — Ask a family member with excellent credit to add you to an old account

Medium-Term Strategies (3-12 Months)

Never miss a payment — Payment history is 35% of your score. Set up autopay for everything
Avoid new credit applications — Each hard inquiry drops your score 5-10 points
Keep old accounts open — Account age matters. Do not close old credit cards even if unused

Cosigner Considerations

A cosigner with strong credit can help you qualify for a mortgage and potentially get a better rate. But the cosigner is equally liable for the debt — missed payments damage their credit too. FHA, conventional, and VA loans all allow cosigners. The cosigner does not need to live in the home, but they must meet the lender's income and credit requirements.

Down Payment Assistance Programs

Many state and local programs offer down payment assistance to buyers with lower credit scores. These programs can provide grants, forgivable loans, or low-interest second mortgages to cover your down payment and closing costs. Your real estate agent and lender can help identify programs available in your area.

What Lenders Look at Beyond Credit Score

Your credit score is important but not the only factor. Lenders also evaluate your complete financial picture:

Debt-to-income ratio — Total monthly debts divided by gross monthly income (aim for under 43%)
Employment history — Two years of steady income in the same field shows stability
Cash reserves — Money left after closing shows you can handle unexpected expenses
Compensating factors — Large down payment, low DTI, or significant savings can offset a lower score

Buying a Home with Bad Credit