A low credit score does not automatically mean you have to put your homebuying plans on hold.
While a higher credit score can make it easier to qualify for a mortgage and may help you secure more favorable loan terms, lenders look at your overall financial picture, not just one number. Your income, debt, credit history, assets, down payment, and the type of mortgage you choose can all play a role in qualifying.
For some borrowers, government-backed loan programs may provide more flexibility than a conventional mortgage.
NOTE: This is for information purposes only and is not an offer to extend customer credit as defined by Section 12 CFR 1026.2 Regulation Z. Program rates, terms and conditions are subject to change at any time. For more licensing information, please visit the NMLS Consumer Access page http://www.nmlsconsumeraccess.org. © 2026 Delmar Mortgage (NMLS ID# 30998)
What Credit Score Do I Need to Buy a Home?
There is no single credit score that guarantees approval for a mortgage.
The minimum score depends on the loan program, lender, and your overall financial situation. Some government-backed programs are specifically designed to provide home financing options for borrowers who may not have perfect credit.
For example, FHA-insured mortgages can allow qualifying borrowers with credit scores as low as 500 to obtain financing. Under FHA guidelines, borrowers with scores of 580 or higher may qualify for the minimum 3.5% down payment, while borrowers with scores from 500 to 579 generally need at least 10% down. Lenders may also have their own requirements beyond the minimum FHA guidelines.
For eligible Veterans and service members, VA loans can be another option. The Department of Veterans Affairs does not establish a minimum credit score for VA-backed loans, although individual lenders may set their own credit requirements.
That means a low credit score is worth discussing with a mortgage professional before assuming you cannot qualify.
1. Start by Understanding Your Credit
Before applying for a mortgage, review your credit history and determine what factors are impacting your credit score. Most credit vendors provide one free credit report per year. You will need to contact the repositories directly to obtain yours.
Mortgage lenders typically review credit reports and scores from the major credit reporting agencies. Your credit report can also reveal errors, outdated information, or accounts that you were not aware of. Consumer Financial Protection Bureau recommends reviewing your credit reports and correcting errors that could negatively affect your ability to qualify or the rate you receive.
Look for:
- Late or missed payments
- High credit card balances
- Accounts in collections
- Recent credit applications
- Errors or accounts you do not recognize
- Previous bankruptcies or foreclosures
Knowing what’s on your credit report gives you a better idea of what a lender may see when you apply. Talk with a Delmar Mortgage Loan Officer to learn more.
2. Look at More Than Your Credit Score
Your credit score is important, but it is only one part of the mortgage qualification process.
Lenders may also consider:
- Income: Is your income stable and sufficient for the loan amount requested?
- Debt: How much of your monthly income is already committed to debt payments?
- Employment history: Does your employment history demonstrate consistency?
- Assets: Do you have savings or other assets that can support the transaction?
- Down payment: How much money are you able to contribute toward the purchase?
- Credit history: What caused the lower score, and has your payment history improved?
The CFPB notes that lenders consider factors including credit history, existing debt, savings, assets, and current income when evaluating a mortgage application.
This is why two people with the same credit score can have very different mortgage outcomes.
3. Consider an FHA Loan
For borrowers with lower credit scores, an FHA loan may be one option worth discussing.
FHA loans are insured by the Federal Housing Administration and are designed to make home financing accessible to a broader range of borrowers.
Generally:
H4: Credit Score | FHA Down Payment Guideline |
580 or higher | 3.5% |
500–579 | 10% |
These are FHA guidelines, not a guarantee that a particular borrower will qualify. A lender will still evaluate income, employment history, outstanding debt, credit history, assets and savings ability, property requirements, and other factors. Individual lenders may also have requirements that are more restrictive than FHA’s minimum guidelines. These are often referred to as “overlays.”
For someone with a lower credit score, the additional down payment required at the lower end of the FHA range can be an important part of the conversation.
4. If You're VA-Eligible, Explore a VA Loan
If you are an eligible Veteran, active-duty service member, National Guard or Reserve member, or a qualifying surviving spouse, a VA-backed home loan may offer another path to homeownership.
The VA itself does not require a minimum credit score. However, lenders own credit standards or overlays.
VA loans also typically do not require a down payment, although there are circumstances where a down payment may be appropriate or required. Eligibility for the VA benefit and approval for a specific mortgage are separate considerations.
If you are VA-eligible and concerned about your credit, don’t assume you are automatically disqualified. Talk with a lender about your specific situation.
5. Reduce Your Debt Before Applying
Your credit score isn’t the only number that matters.
The amount of debt you have relative to your income can affect how much you may be able to borrow. Reducing monthly debt obligations may improve your overall financial profile.
Before applying for a mortgage, consider whether you can:
- Pay down high credit card balances
- Avoid taking on new debt
- Pay accounts on time
- Avoid financing large purchases
- Keep your existing credit accounts in good standing
You don’t necessarily need to eliminate every debt before buying a home. The goal is to understand how your existing obligations affect your ability to qualify.
6. A Larger Down Payment May Help
A larger down payment can sometimes strengthen a mortgage application, particularly when credit is less than ideal.
Putting more money into the transaction can reduce the amount you need to borrow and may improve the overall loan-to-value ratio.
However, don’t drain your savings simply to increase your down payment.
Homebuyers also need to account for closing costs, moving expenses, emergency savings, and the ongoing costs of owning a home. The right down payment depends on your complete financial situation, not just your credit score.
7. Be Careful About Applying for New Credit
If you’re preparing to buy a home, this may not be the best time to open several new credit accounts.
Applying for or opening multiple accounts in a short period can affect your credit profile. The CFPB recommends avoiding unnecessary new credit when preparing for a mortgage.
That means it’s generally wise to think twice before:
- Financing a new car
- Opening several new credit cards
- Applying for store financing
- Taking out a personal loan
If you’re serious about buying a home, talk with your mortgage professional before making major changes to your finances.
8. Don't Assume You Need a Co-Signer
A co-signer may be an option in some lending situations, but it isn’t a universal solution for a low credit score.
Mortgage qualification involves multiple factors, and adding another borrower can introduce additional considerations, including that person’s income, debts, credit history, and financial obligations.
Instead of assuming you need a co-signer, start with a conversation with a mortgage professional who can evaluate your actual situation and explain what options may be available.
9. Shop Around for the Right Lender
One of the most important steps when you have a lower credit score is finding out what you qualify for rather than relying on general credit score rules you find online.
Different lenders can have different requirements, particularly when it comes to credit history and lender-specific underwriting standards.
This is especially important with VA loans, because while the VA does not establish a minimum credit score, individual lenders can set their own requirements.
A mortgage professional can help you understand which loan programs may fit your situation and what steps could improve your position if you’re not ready to move forward yet.
Can I Get a Mortgage With a 500 Credit Score?
Possibly.
An FHA loan may allow a borrower with a credit score between 500 and 579 to qualify with a minimum 10% down payment under FHA guidelines. However, meeting a program’s minimum credit score requirement does not guarantee mortgage approval.
Your income, debt, credit history, assets, property, and lender requirements will also matter.
If you’re VA-eligible, the VA does not set a minimum credit score, although your lender may.
If your score is around 500, don’t automatically assume the answer is no. Find out what your options are.
Will a Low Credit Score Mean a Higher Mortgage Rate?
It can.
In general, higher credit scores can help borrowers qualify for more favorable mortgage rates, while a lower score can make borrowing more expensive. The CFPB notes that credit scores can affect both whether you qualify for a mortgage and the rate you pay.
That’s one reason it can be valuable to understand whether you’re ready to buy now or whether spending some time improving your credit could put you in a stronger position.
There isn’t always one right answer. Waiting may give you time to improve your credit, but home prices, rates, and your personal circumstances can also change.
What If I'm Not Ready to Qualify Yet?
A lender conversation can still be useful even if you aren’t ready to buy today.
If your credit score is holding you back, you may be able to create a plan to improve your financial position before applying. That could include paying down debt, addressing credit-report errors, establishing a stronger payment history, saving additional funds, or simply allowing time for your credit profile to improve.
The important thing is to know what is actually preventing you from qualifying.
Instead of focusing only on the question, “Is my credit score high enough?” ask:
What would I need to change to become mortgage-ready?
That answer will be different for every borrower.
The Bottom Line: A Low Credit Score Doesn't Always Mean No
Buying a home with less-than-perfect credit may be possible.
FHA financing can offer options for some borrowers with lower credit scores, while eligible Veterans may have additional flexibility through VA financing. Your credit score is important, but it is only one part of the mortgage qualification process.
The best next step is to understand your complete financial picture and talk with a mortgage professional about your options.
Don’t rule yourself out based on a credit score alone. Find out what you may qualify for—and, if you’re not ready yet, what steps can help you get there.
Frequently Asked Questions
What is the lowest credit score needed to get a home loan?
There is no single minimum credit score for every mortgage. FHA guidelines allow qualifying borrowers with scores as low as 500, while VA does not establish a minimum credit score for VA-backed loans. Individual lenders may have additional requirements.
Can I buy a house with a 500 credit score?
Possibly. Under FHA guidelines, borrowers with scores from 500 to 579 generally need at least 10% down. You must also meet the other requirements for the loan and lender.
Can I get a VA loan with bad credit?
Possibly. The VA does not set a minimum credit score for VA-backed loans, but lenders may establish their own credit requirements and will evaluate your overall financial situation.
Does a larger down payment help with a low credit score?
A larger down payment can strengthen your overall mortgage application and reduce the amount you need to borrow, but it does not guarantee approval. You should also maintain enough savings for closing costs and other homeownership expenses.
Should I improve my credit before buying a home?
It depends on your situation. Improving your credit may help you qualify for better loan terms, but waiting isn’t always necessary if you already have a viable mortgage option. A mortgage professional can help you compare the potential benefits of buying now versus taking time to improve your financial profile.
How can I find out if I qualify for a mortgage with my current credit score?
Talk with a mortgage professional and provide an accurate picture of your income, debts, assets, credit history, and available funds. They can help determine which loan programs may be appropriate and whether there are steps you can take to strengthen your application.
