Credit First Time Buyers

Credit. What Scores Do You Need to Buy Your First Home?

The answer to this question isn’t as simple as it might seem.

One reason is that many of us have different ideas about what a “good” credit score is.

I’ve met clients with 720+ credit scores who were worried about qualifying for a home loan…and that’s a very good score.

I’ve also met people with 475 credit scores, 15 collections on their credit report, 5 judgments and no credit accounts in good standing, who were surprised and even angry to find out they weren’t able to get approved for a loan. Yes, this has actually happened.

The real answer to the question of, “Is my credit score good enough?” is…

It depends.

What does it depend on?

The minimum credit score you’ll need depends in-part on your overall qualifications, and in-part on other factors unique to you.

Here are a few examples of what these qualifications and other factors might be:

  • Your debt-to-income ratio
  • Whether you have money to put down, and if so, how much
  • The loan program that you end up going with
  • Your overall credit history
  • Your employment history

…and more.

You should also be aware that different lenders have different credit score requirements.

One lender may choose to approve FHA loans for borrowers with a credit score of 580. While the lender down the street might set their minimum credit score for an FHA loan at 620.

Since credit score requirements can vary from borrower to borrower and even lender to lender, it wouldn’t make sense to go into specific minimum credit score requirements here. There are simply too many variables.

Instead, let’s take a look at a general guideline for credit score quality:

  • Excellent: 740+
  • Good: 700-740
  • Average: 660-700
  • Below Average: 620-660
  • Poor: 600-620
  • Bad: Under 600

Your credit score is a huge factor in determining whether you qualify for home financing.

It is also directly tied to your loan pricing. A higher credit score will usually get you a better interest rate than a lower score.

And if your credit score is lower than you’d like, remember, most seasoned loan professionals can give you tips for how to raise it.

It’s not uncommon for people to leave my office with a three to five-step plan for fixing their credit and improving their scores to qualify for home financing down the road.

It’s also not uncommon for clients with average or good credit scores to leave my office with a 2-3 step plan for improving their scores quickly…even if they’re pre-approved and start looking at homes.

In fact, in my experience those with credit scores in the 640-700 range often have the greatest chance for fast improvement. It’s not uncommon to get a big increase in only a few simple steps.

Would you like to figure out if your credit is good enough to get approved for home financing?

Here are some suggestions for how to check your credit score and how to figure out if it’s good enough to get you approved for home financing:

  • Apply for home financing and meet with a quality Mortgage Advisor who can show you your options
  • If you already know that your score is low, meet with a Mortgage Advisor who is experienced with credit to discover ways to improve your score
  • Pull your own credit report and score(s) at (credit reports are free…credit scores involve a small charge)
  • Meet with a Housing Counselor

Regardless of what your current scores are, one thing I suggest is that you be pro-active about your credit.

If there’s any work to be done, you’ll do yourself a favor by getting started as soon as possible.


  • Very helpful. Credit is scary when deciding if you can buy a home. I will take a few suggestions from this article and use them to better prepare myself to deal with my credit history.

  • Thanks Stacey, I appreciate the comment. If you have any questions about credit or how to improve your scores – feel free to leave them here and I’ll reply. Or, email me directly under the “About” link in the menu bar.

  • This is a great explanation of the credit process! I’m looking forward to showing it to prospective buyers as the “Big C” question always comes up and many buyers don’t realize that credit score is just one piece of the mortgage puzzle. Jeff, thanks for make these terms easy to understand!

  • This might be the most informative article I’ve read about credit and buying a house. Great information. This can help out many new home buyers.