What Credit Score Do You Really Need To Buy a Home?

According to Fannie Mae, 90% of buyers either don’t know the credit score lenders require or overestimate it.

That means most homebuyers believe they need a higher score than they actually do, and you might be one of them. This misconception could make you think homeownership is out of reach, even when it’s not.

Let’s break down the facts about credit scores and buying a home so you know exactly where you stand.

There’s No Single “Magic Number”

Here’s the truth: there’s no universal credit score you absolutely must have to buy a home. The requirements vary depending on the lender, loan type, and other financial factors.

As FICO explains:

“While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single ‘cutoff score’ used by all lenders, and there are many additional factors that lenders may use . . .”

This flexibility means the door to homeownership could be more open than you realize. The best way to find out your options? Talk to a trusted lender who can review your full financial picture.

Why Your Credit Score Still Matters

While there’s no single number required, your credit score still plays a big role in the homebuying process. Lenders use it to gauge how reliably you handle money, including making payments on time and paying off debts.

Your score can influence:

• The loan programs you qualify for

• Your mortgage interest rate

• Your loan terms and total borrowing costs

Since mortgage rates impact your monthly payment and overall affordability, improving your score could help you qualify for better loan terms  and potentially save thousands over the life of your mortgage.

How To Improve Your Credit Score Before Buying a Home

If you find out your score isn’t where you’d like it to be, don’t panic. With a little time and strategy, you can work to raise it. According to the Federal Reserve Board, here are smart steps to take:

1. Pay Your Bills on Time – Consistency is key. Lenders want to see a track record of on-time payments, whether it’s your credit card, utilities, or cell phone bill.

2. Pay Down Existing Debt – Lowering your credit utilization ratio (the amount of credit you’re using compared to your total limit) makes you appear less risky to lenders.

3. Review Your Credit Report – Request a free copy from each major credit bureau, and dispute any errors that may be dragging down your score.

4. Avoid Opening New Credit Accounts – Multiple new credit applications can lead to hard inquiries, which temporarily lower your score.

Even small improvements in your score can make a difference in your interest rate and loan options.

Bottom Line

You don’t need perfect credit to qualify for a mortgage. But a stronger score can help you secure better terms, lower your interest rate, and increase your buying power.

The best first step? Connect with a reputable lender to learn where you stand, explore your options, and create a plan to get mortgage-ready.