Do I Need A Good Credit Score To Get A Mortgage?

Published on May 1, 2018 under First-Time Home Buyers

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Many people believe that they will only qualify for a loan for a mortgage if they have a great credit score. While having a great credit score is a good thing when you are buying a home, to say that you cannot get a home without a stellar credit score is simply not true.

So, if you are someone seeking a mortgage and don't have the best of credit, fear not. There are loan options available for people with a variety of credit scores.

The Pros To Having A Good Credit Score:

While people with a variety of different credit scores can indeed get approved for a mortgage, having a good credit score will indeed have its advantages when trying to buy a home. The following are included benefits when it comes to having a strong credit score and looking to get a loan to buy a home:

  • Highest Credit Scores Mean Lowest Interest Rates: The higher your credit score is the lower their interest rate will likely be. Higher credit scores show you are reliable and pay off your debts on time. This can mean you save thousands of dollars over the lifetime of a 15 or 30-year mortgage.
  • Requires Smaller Down Payments: People with higher credit scores can get a home with less down payment than those with lower credit scores.
  • Better Chances To Get a Loan: While some companies will give loans to people with a variety of credit scores, those with higher credit scores are less likely to have an issue getting a loan than those with lower credit scores. Point being, the higher your credit score the more options you will have when it comes to securing a loan with the lender of your choice.

What Is Considered A Good Credit Score?

A "good credit score" can vary depending on what you're trying to qualify for. For the purposes of qualifying for a loan for a mortgage, the following chart is used for what qualifies as what kind of credit score:;

  • Aim for the 700s as a mid-to-good range for your credit score to be in
  • Scores at 720 and above are considered excellent - this is ultimately the range you want to aim to get your credit to so you are ensured the better interest rates
  • Scores ABOVE 760 receive the best rates although scores above 720 will receive what is considered very good rates
  • Under 680 will still qualify you for some mortgages. You will likely pay higher interest rates than you would if you're score was in the mid 700s range

For Those With Lower Credit Scores Consider "Nontraditional" Loans:

For those who have lower credit scores (under the 700s), you may consider getting a non-traditional loan that is not backed by Freddie Mae or Fannie Mac. Some smaller lenders will offer better mortgage rates to those with a little bit lower credit scores than the "mainstream" lenders would offer. These lenders tend to put less importance and stress on credit score and also consider other factors such as your income level and debt obligations when approving or declining someone for a loan for a mortgage.

Another option may be a government-funded FHA loan that lets people with a credit score as low as 500 get loans for a home, although the FHA will encourage credit scores to be at 640 or higher to qualify for the loans with the lowest interest rates.

How Do I Build My Credit Score?

If you are looking to "up" your credit score before purchasing a home, consider some of the following tips to help you ensure your best chance of getting a loan with the best possible interest rates. Some ways to "up" that score includes the following:

  • Make your payments such as rent or your credit card bill consistently and on time
  • Keep your monthly spending to 30% or less of your total credit card limit
  • Pay down your credit card (or at least the minimum payment) on time each month to keep up with the money you are charging on your cards
  • Work with a credit counselor to further build your credit score


People with "less than stellar" credit can indeed get a mortgage loan, however, the better your credit rating is, the better (lower) interest rates you are likely to get on your loan. Remember, a few points in your credit score can mean the difference of thousands over the life of a 15-to-30-year fixed mortgage loan. Build your credit up as high as you can to get the best rates possible, but remember, even if you have less than perfect credit, you may still be eligible for a loan to purchase a home.

Contact an Expert Loan Officer