What Credit Score Do You Need to Buy a Home?
This is probably the question most buyers actually want answered. And unfortunately, there isn’t one magic number that applies to every mortgage.
Credit requirements depend on factors such as:
- Loan program
- Lender
- Down payment
- Debt and income
- Property type
- Occupancy
- Overall financial profile
- How the loan is underwritten
For example, Fannie Mae’s current guidance says manually underwritten fixed-rate loans generally have a
620 minimum credit score, while loan files evaluated through its Desktop Underwriter don’t have a single minimum score requirement; the automated system evaluates the borrower’s overall credit risk.
Other mortgage programs and individual lenders may have different requirements.
So rather than asking:
“Is my credit score high enough to buy a house?”
A more useful question is:
“Given my credit, income, assets, debts, down payment, and goals, what financing options are available to me?”
That’s a conversation to have with a qualified mortgage professional.
How Do Mortgage Lenders Use Your Credit Scores?
This is another area where older information can cause confusion.
You may have heard that a mortgage lender simply takes your three credit scores and averages them together. That’s not necessarily how it works.
Under Fannie Mae’s current guidance, when three credit scores are obtained for one borrower, the
middle score
is generally selected as that borrower’s representative score. When two scores are obtained, the lower is used.
Rules can become different when there are multiple borrowers or certain manually underwritten loans.
For example, if your applicable scores were:
741 | 764 | 789
The middle score would be
764.
The specific scoring models and underwriting process depend on the mortgage and lender, which is another reason it’s better to have a lender review your actual profile than rely solely on a score shown in a consumer app.
What Determines Your FICO Score?
FICO identifies five primary categories that influence its base scoring model.
1. Payment History — Approximately 35%
This is the largest component. It considers whether you’ve made payments on credit accounts as agreed.
Late or missed payments can affect your score, which is why consistently paying bills on time is one of the most important habits for maintaining healthy credit.
2. Amounts Owed — Approximately 30%
This category considers how much debt you owe, including how much of your available revolving credit you’re using.
Using a large portion of available credit can affect your score even if you’re making payments on time.
3. Length of Credit History — Approximately 15%
Generally, a longer established credit history provides more information about how you’ve managed credit over time.
That’s one reason closing an older account or opening several new accounts shortly before applying for a mortgage deserves careful consideration.
4. New Credit — Approximately 10%
Opening several accounts within a short period can indicate increased credit risk.
When you’re preparing to purchase a home, avoid opening new credit accounts unnecessarily without first discussing the potential impact with your lender.
5. Credit Mix — Approximately 10%
- FICO also considers the types of credit accounts in your history, such as revolving credit cards and installment loans.
- You don’t need to intentionally take on debt simply to create a particular mix of accounts.
- The goal is responsible credit management over time.
Does Checking Your Credit Hurt Your Score?
Checking your own credit generally doesn’t hurt your FICO Score.
The situation is different when a lender checks your credit as part of a loan application. That generally creates what’s known as a
hard inquiry, which can have a small effect on your score.
But don’t let that stop you from comparing mortgage lenders.
The Consumer Financial Protection Bureau says that multiple mortgage credit checks made within a
45-day window are recorded on your credit report as a single inquiry.
That allows buyers to shop around and compare financing rather than feeling locked into the first lender they contact.
Should You Avoid Opening New Credit Before Buying
a Home?
Generally, this is something worth discussing with your lender.
If you’re preparing for a mortgage, opening a new credit card, financing a vehicle, or taking on another significant debt could change your financial profile.
A new obligation could potentially affect:
- Your credit score
- Your debt-to-income ratio
- Your mortgage qualification
- The amount you can borrow
- CFPB recommends being thoughtful about applying for other types of credit immediately before or during the mortgage process. That doesn’t mean you should never use credit while planning to buy a home.
It means major financial changes are better discussed with your mortgage professional before you make them.
How Can You Improve Your Credit Before Buying
a Home?
There is no legitimate overnight trick that guarantees a specific increase in your credit score.
But if homeownership is part of your future plans, giving yourself time can help.
- Consider starting with a few fundamentals:
Pay bills on time >
Payment history is the largest component of a base FICO Score.
- Review your credit reports for errors:
Make sure the information being reported about you is accurate.
- Manage revolving balances carefully:
Reducing credit-card balances may improve your overall credit profile.
- Be cautious about opening or closing accounts:
Changes to your credit profile can have effects you didn’t anticipate.
- Avoid unnecessary new debt before applying for a mortgage.
- Talk with a mortgage professional early:
Rather than guessing what needs to change, have someone evaluate your actual financial situation and explain which factors may matter for your intended loan.
FICO similarly recommends paying bills on time, lowering credit utilization, avoiding unnecessary new hard inquiries, and correcting errors when preparing for a mortgage.
